Arm chip demand surges on AI: order volume doubles to $2 billion

Arm Holdings is seeing unprecedented demand for its CPU architectures. CEO Rene Haas said order volume has simply taken off in recent weeks: in five weeks, the company received orders worth $2 billion, twice its usual monthly volume. According to the CEO, they have never seen growth like this, and the wave is only beginning.

Why AI is turning the tables for Arm

The main driver of demand is AI computing in data centers. Cloud providers are moving en masse to the Arm architecture to serve large language models. Server rooms were once dominated by Intel and AMD with their x86 architecture; now Arm is actively taking market share as an alternative with far better energy efficiency and a lower total cost of ownership.

The migration is happening because training modern AI models requires petabytes of computation and weeks of work on large clusters. At that scale, cloud providers face colossal electricity bills, sometimes several billion dollars for a single training run of a large model. Arm chips can cut power consumption by 30-40% compared with x86, which means saving billions of dollars over several years of operation.

The main advantages of Arm for cloud providers:

• Power consumption 30-40% lower than x86, saving on electricity and cooling
• The architecture scales to clusters of thousands of servers without losing efficiency
• Support from the cloud giants (AWS Graviton, Google TPU, Microsoft Cobalt) guarantees tooling and software
• Total cost of ownership of a cluster drops by 20-25%, even after licensing fees

Smartphones retreat, servers advance

Meanwhile, the smartphone market, historically Arm's main source of revenue, is in serious stagnation. Flagships launch rarely, consumers hold on to their old phones longer, and manufacturers are freezing releases of new lineups. Competition prevents price increases. The mobile segment, which drove Arm's growth in 2010-2020, is no longer growing.

But for the company this is a relief rather than a disaster. Demand for server chips for AI infrastructure more than offsets the decline in mobile, with a wide margin. Analysts forecast that data centers will become Arm's main source of revenue as early as 2026-2027, a turning point in the company's history.

"This is an explosion of demand that we haven't seen before," said

Rene Haas.

What this means

Arm is transforming from a mobile specialist into a leading supplier of chips for AI infrastructure and cloud computing. This will reshape the entire processor market for the next 5-7 years and sharply intensify competition among cloud providers for the most efficient and cheapest solutions for training large models. Companies that do not move to Arm now risk falling behind in the race for computing power.