Counterpoint Research noted on Thursday that the AI infrastructure market is undergoing a structural shift as hyperscalers increasingly move away from Intel Corp. and Advanced Micro Devices Inc.’s legacy x86 central processing units (CPUs) toward proprietary Arm Holdings plc Arm-based designs to optimize cost, efficiency, and control.
Major cloud players such as Alphabet Inc. Google, Amazon.com Inc. Amazon Web Services, Microsoft Corp., and Meta Platforms Inc. are leading the transition by redesigning their AI server stacks around Arm-based CPUs, as per Counterpoint.
Historically, these companies relied on x86 processors from Intel and AMD due to software compatibility and existing infrastructure. However, the rise of custom AI accelerators has increased the need for heterogeneous architectures, accelerating the adoption of Arm-based CPUs built on Neoverse cores, the firm noted.
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This shift reflects a broader strategy: hyperscalers are designing in-house silicon to reduce reliance on external vendors, improve margins, and lower the cost of running AI workloads at scale.
Arm Holdings is gaining traction as its architecture delivers significantly better performance per watt than traditional x86 systems, a critical advantage in power-constrained data centers, according to Counterpoint.
Companies are already deploying Arm-based CPUs across AI infrastructure. Google is scaling its Axion CPU for next-generation Tensor Processing Unit (TPU) systems, while AWS is expanding the use of its Graviton processors alongside Trainium chips. Microsoft has integrated its Azure Cobalt Arm CPU with its Maia AI accelerators, embedding Arm into its AI stack from the outset, the firm added.
These deployments show that Arm is no longer limited to general-purpose cloud workloads but is becoming central to AI server design.
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The transition is unfolding generation by generation, with hyperscalers aligning CPU design closely with their proprietary AI accelerators. Meta Platforms has reinforced this trend by selecting Arm as a strategic partner for its next-generation Meta Training and Inference Accelerator (MTIA) infrastructure and serving as the launch customer for Arm’s Artificial General Intelligence (AGI) CPU platform, Counterpoint told.
