Arm CPUs See server Market Share Jump to 25% on Nvidia Demand

Nvidia isn’t the only one riding the AI boom. During the second quarter, Arm CPUs captured a quarter of the server market, according to a recent Dell’Oro Group report.

ThatS up from 15 percent of the server market a year ago, Dell’Oro analyst Baron Fung tells The Register.

The driving force behind this trend is the adoption of Nvidia’s Grace-Blackwell rack-scale compute platforms like the GB200 and GB300 NVL72.

Each of the 120-kilowatt machines is equipped with 72 Blackwell GPUs and 36 of Nvidia’s Grace CPUs. the 72-core chips, first introduced in 2022, are based on the British chip designer’s Arm Neoverse V2 architecture and have been optimized to maximize data movement by taking advantage of Nvidia’s custom nvlink-C2C interface.

Arm servers Are Gaining Ground on GPUs

The server market is shifting. For years, GPUs dominated high-performance computing. Now,Arm-based servers are becoming a serious contender,and they’re gaining traction faster than many expected.

Analyst Ben Thompson of Stratechery recently highlighted a key trend: Arm server revenue is now comparable to revenue from cloud GPUs. This is a significant leap. Just a year ago,Arm’s server share was almost entirely driven by custom silicon from companies like Amazon Web Services (AWS) with its Graviton processors.

AWS has been a pioneer in custom Arm silicon, starting back in 2018. But the last few years have seen Microsoft and Google jump into the game with their own Arm-based CPUs – Cobalt and Axion, respectively. These aren’t just experiments; they’re strategic investments in a different approach to server architecture.

Like Graviton, Cobalt and Axion are designed for specific workloads.They excel at tasks like web serving, application hosting, and even some machine learning inference. This targeted approach allows them to deliver impressive performance per watt, a critical factor for large cloud providers focused on reducing energy costs.

Nvidia still holds a dominant position in the GPU market, especially for demanding workloads like AI training.However,the rise of Arm servers presents a real challenge. It forces Nvidia to compete not just on performance, but also on efficiency and cost. Expect to see continued innovation and competition in the server space as Arm continues to gain momentum.