Arm's Data Center Dominance: 14-Fold Customer Surge Driven by AI Boom

Exclusive: Arm estimates a 14-fold increase in data center customers since 2021, company says

SAN FRANCISCO, July 9 (Reuters) - The number of customers that use Arm-based (O9Ty.F), opens new tab chips in data centers has grown to 70,000, a 14-fold increase since 2021, the company told Reuters. Under the guidance of Chief Executive Rene Haas, chip technology maker Arm has been working to expand its business into the PC market and has made substantial gains selling its architecture for data center chips as well. Like other chip companies, Arm has benefitted from the frenzy around generative artificial intelligence computing and said a significant portion of its data center growth is due to AI. The company said it had seen a 12-fold spike in startups that are using Arm chips from 2021. Arm's strong outlook arrives as the chip industry faces near term challenges. While chips related to building AI data centers have boomed, other large swaths of the semiconductor market such as PC and mobile sales have remained slow. The company declined to provide annual financial guidance due to trade uncertainty when it released results in May. Chips based on the Arm architecture are known for delivering high performance with low energy consumption, which is one of the reasons it powers just about every mobile phone on the planet. Such performance has been adapted by chip designs for data center processors, which typically consume substantially more energy. The data center market earlier proved difficult for Arm to break into, but the company has more recently been aided by cloud computing giants such as Amazon (AMZN.O), opens new tab, Alphabet's Google (GOOGL.O), opens new tab and Microsoft (MSFT.O), opens new tab developing home-grown Arm chips for use in their sprawling infrastructure. Customers often rent Arm-based chips through a cloud computing company such as Amazon's AWS. Amazon has rolled out several generations of its data center processor (CPU) since 2018, including artificial intelligence versions, and added millions Arm-based chips to its cloud computing platform. But SoftBank-owned Arm has made big gains in other areas as well, as it seeks to erode the computing dominance of designs from Advanced Micro Devices (AMD.O), opens new tab and Intel (INTC.O), opens new tab, based on the x86 architecture. The group of developers worldwide working to make apps that run its tech is crucial to a chip company's success. According to the company, Arm has roughly doubled the number of applications since 2021 running on Arm-based machines to 9 million. The developer base working with the company's computing architecture has increased by 1.5 times to 22 million since 2021. Reporting by Max A. Cherney in San Francisco; Editing by Sonali Paul Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence Max A. Cherney Thomson Reuters Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron's magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.

Chip Giant ARM Sees 14x Surge in Data Center Customers in Just a Few Years, Thanks to Massive Adoption By Big Tech

ARM has opened up a massive revenue frontier with the data center market, as based on a new report, the company has seen success in selling its chips to global tech giants. With the AI hype almost benefiting everyone who decided to capitalize on it, ARM is one of the more notable companies that has witnessed phenomenal progress in just a few years. The company was more popular in the mobile markets before entering the data center segment, and it did have some traction with Apple's M-series SoC, but that was the only revenue frontier ARM had opened up. But now, based on a report by Reuters, it is claimed that the chip firm has managed to increase DC customers by a whopping 14-fold in just four years, marking a massive accomplishment. Interestingly, ARM has managed to double the number of applications running on ARM-based machines since 2021, and this shows that the firm has seen much larger traction with its chips in the market. In terms of ARM's primary customers, the company has sold millions of chips to the likes of Amazon, who designs its custom ARM-based processors, known as the Graviton series, that are offered to AWS customers. Apart from Amazon, Google offers ARM-based chips to its customers through Ampere's Altra processors, and a similar situation is the case with Microsoft. ARM has managed to take over the DC segment and has snatched away a pretty hefty market share from x86 alternatives from Intel and AMD. More importantly, ARM is a primary supplier to NVIDIA. The company powers Team Green's Grace CPU platform, which is the performance driver of the company's rack-scale solutions, and this shows that ARM has indeed secured the trust of several of its customers in the DC market. ARM has also managed to make an impact on the PC segment in the past few years, as well, since the company saw the adoption of its chips with Qualcomm's Snapdragon X Elite SKUs, which posed a viable threat to the dominance of x86 in the market. It won't be wrong to say that ARM is making moves in the market, and with the potential launch of an AI PC chip with NVIDIA, the firm could very well be a threat to Intel and AMD's position in the computing markets.