Arm aims to capture 50% of data center CPU market in 2025

(Image credit: Arm)

Arm Holdings hopes to increase its share of the global data center CPU market from 15% to 50% by the end of 2025. Mohamed Awad, senior vice president of infrastructure at Arm, made the claim in an interview with Reuters. The company pins its hopes primarily on AI servers, so consider offerings like Nvidia's GB200 and GB300 machines, custom silicon from large cloud service providers, and Ampere Computing-based systems.

Most servers today run AMD's EPYC processors or Intel's Xeon CPUs that rely on the x86 instruction set architecture, as there is more data center-grade software for x86. However, the situation is changing, and Arm says that some server programs are now developed for Arm-based processors first and then ported to x86. Google and Microsoft have also started designing data center processors with Arm's technology, although their projects are at an earlier stage compared to Amazon.

While x86 dominates the server market and will likely continue for a while, Arm adoption is growing. Arm is used by Amazon Web Services for its Graviton CPUs, which are used for many of its instances instead of AMD's or Intel's processors. Half of the processors used by AWS are indeed Arm-based Graviton CPUs.

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In addition, Ampere Computing offers Arm-based CPUs for data centers. Ampere is a chip designer backed initially by Oracle but now owned by SoftBank (which also happens to own Arm Holdings).

In addition to AWS and Ampere, Nvidia is emerging as a major backer of Arm in the datacenter space. The company's Grace CPUs with 144 Arm Neoverse V2 cores power GB200 and GB300 AI servers will likely become popular with large cloud service providers.

But Arm pins its hopes not only on AWS, Ampere, and Nvidia. The company also offers compute subsystems (CSS) based on its Neoverse cores, enabling chipmakers to build their data center-grade CPUs relatively easily. Furthermore, Arm is reportedly developing its own CPUs for large cloud service providers, such as Meta. These CPUs have yet to gain market share, though if Meta deploys them in volume, they will inevitably control a significant part of the server CPU market as Meta is one of the major users of servers globally.

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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

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16 Comments Comment from the forums

artk2219

Im curious to know what metrics they're going to use to say that they supposedly grabbed an extra 35% of the market in 9 months.
Reply
JamesJones44

ARM is definitely growing in the service space, we use ARM a far bit these days for our backend services. However, I struggle to see how ARM is going to increase their market share 3.3x in 9 months to 50% from 15%. I doubt enough applications will come online that can run on ARM in that short period of time while replacing x86/x64 versions of their services.
Reply
bit_user

The article said:
Google and Microsoft have also started designing data center processors with Arm's technology, although their projects are at an earlier stage compared to Amazon.
It's true that they're at an earlier stage of maturity, but both have had cloud instances available to customers for a while. Microsoft's is called the Cobalt 100:
https://azure.microsoft.com/en-us/blog/azure-cobalt-100-based-virtual-machines-are-now-generally-available/
Google has its Axion-branded ARM server CPUs, which Phoronix even benchmarked against an x86 instance and an Ampere Altra:
https://cloud.google.com/products/axion
https://www.phoronix.com/review/google-axion-c4a
Like Amazon and Nvidia, Google went with Neoverse V2 cores, while MS broke from the pack and used a greater number of the smaller Neoverse N2 cores.

The article said:
The company's Grace CPUs with 144 Arm Neoverse V2 cores
No, it's only 72 cores per CPU. Same as Google Axion. Amazon's Graviton 4 went up to 96 cores per CPU.

The way Nvidia reaches 144 cores is by putting two Grace CPUs on a module. Each has its own LPDDR5X DRAM and they communicate via NVLink. So, they're every bit as distinct as two x86 CPUs would be, when you have dual-CPU server mainboard. Remember: Nvidia always inflates their numbers. The only thing that differs is how.

BTW, I think AMD is going to have a major ARM server CPU announcement later this year, as well. I have no specific information, so call it a hunch.
Reply
Notton

ha, good joke arm, almost had me.
Reply
wommy90

did anyone else get scroll jacked by an Ad n teleported to the bottom of the page?
Reply
TerryLaze

While x86 dominates the server market and will likely continue for a while, Arm adoption is growing.
The revenue for amd and intel for datacenter in all of 2024 was 12,5 and 12,8 bil
Let's face it, servers are dominated by GPUs, or now NPUs I guess will be the hot thing.
Nvidia made 130 bil revenue last year, I don't know how much of that was gaming GPUs but, come on.
Reply
bit_user

TerryLaze said:
Nvidia made 130 bil revenue last year, I don't know how much of that was gaming GPUs but, come on.
IIRC, gaming was about 9% of their revenue.
Reply
jp7189

Considering the short time horizon, and the time it takes to fab, package, and integrate CPUs in to product (DC stuff takes more engineering and integration time), 2025 is mostly set in stone already. So, this guy either knows something or is utterly clueless.
Reply
Pierce2623

Call me crazy, but doesn’t that seem a bit optimistic?
Reply
bit_user

Pierce2623 said:
Call me crazy, but doesn’t that seem a bit optimistic?
Certainly, if we're talking about installed base. However, he could mean as a share of sales. With virtually all the big cloud providers transitioning to ARM, it does sound like it might be at the optimistic end of plausible that 50% of all server CPUs deployed in 2025 could be ARM-based.

Also, keep in mind that Intel won't have any new server CPUs until 2026 and I think the same is basically true of AMD. That makes x86 basically a known quantity and a fixed target. If these Neoverse V2 & N2-based CPUs are offering better TCO, then there's a motive to pair with the means (above).
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