US Markets
Home›US Markets›Sectors›Arm’s AI server platform overtakes x86, lifting data c…
Arm’s AI server platform overtakes x86, lifting data center royalty growth
IDC pegged accelerated server value on Arm at $53 billion in the quarter, and raised its full-year AI infrastructure spending forecast to $497 billion.
IDC’s first-quarter AI infrastructure update found Arm has overtaken x86 as the largest AI server platform, with accelerated server value on Arm rising to $53 billion in the quarter, up from below $30 billion in the third quarter of 2025. The research firm also lifted its full-year forecast for AI infrastructure spending to $497 billion.
The dynamic matters for Arm because its business model turns chip shipments into revenue through licensing. Arm takes royalties on chips made using its architecture, so competition among chipmakers effectively increases payouts to Arm even as customers build competing hardware on Arm-based designs.
Arm reported fiscal 2026 revenue of $4.92 billion, up 23%, including $2.61 billion of royalty revenue, and data center royalties more than doubled year-over-year in the fourth quarter. The company said its newer Armv9 architecture carries roughly double the royalty rate of the prior generation, supporting higher royalty take per chip as volumes grow.
Arm also began moving into producing its own hardware, unveiling an AGI data center CPU on March 24 with Meta as a lead partner and early customers including OpenAI, Cloudflare, and SAP. Arm CEO Rene Haas said the chip could bring in $15 billion a year by 2031, with first production revenue expected not until the final quarter of fiscal 2027, while demand commitments for fiscal 2027 and 2028 passed $2 billion on a May earnings call, according to Yahoo Finance.