ARM targets 50% of the AI market in 2025

Published: 2025-03-31 11:11:51 ET ARM

By Esteban Tesson

British chipmaker ARM aims to triple its share of the artificial intelligence data center market by 2025. This ambition is underpinned by its original business model, growing compatibility and attractive energy efficiency.

ARM Holdings, a company that is 90%-owned by SoftBank, specializing in chip architectures, is planning a spectacular breakthrough in the artificial intelligence sector. According to its latest projections, the company aims to increase its market share in AI data centers from 15% to 50% by next year. This is indeed a bold ambition, although is one that builds on a momentum that is already well underway.

Royalties, design and efficiency

Unlike manufacturers like Intel or Nvidia, ARM does not produce chips. Its model is based on the sale of designs and technical elements, accompanied by a system of royalties. These royalties are particularly lucrative in the field of AI, being higher than in traditional systems.

As a result, giants such as Nvidia or Alphabet can offer chips stamped with their own name, while relying on ARM architecture. This is notably the case for the Grace chip, used in several Nvidia systems.

At the same time, the energy efficiency of ARM architecture represents an increasingly valuable asset, as the energy cost of AI becomes a major issue in industry.

For a long time, ARM's development was restrained by the dominance of x86 architecture, used by Intel and AMD. This ubiquitous standard made it difficult to switch to other architectures. However, the situation changed with Apple 's transition to its ARM-based M1 chips, followed by growing adoption in data centers.

"We've reached the point where software is developed for Arm first and foremost," says Mohamed Awad, head of infrastructure at ARM. The movement is supported by several giants: Amazon has designed ARM chips in-house that represent over half of the capacity added to its data centers over the past two years. Google and Microsoft are following suit with more recent projects.

With a lean business model, an increasingly adopted technology and strong partners, ARM seems well positioned to change dimensions in AI. It remains to be seen whether the pace can keep up to expectations.

Esteban Tesson