More than three decades after its founding and six months after launching a CPU design for AI infrastructure, Arm has emerged as a serious data center contender as enterprises grapple with thorny decisions around AI security, privacy and cost.

Arm began as a consumer technology, embedded in 1990s PCs and early mobile phones, branching out into edge and IoT devices over the next two decades. In 2016, Softbank acquired the company, injecting R&D funding that led to Arm forays into high-performance computing and cloud server infrastructure, most notably as the basis for AWS Graviton servers in 2018.

Along the way, more business software, programming languages and operating systems became compatible with Arm chips, further increasing adoption for applications where Arm's low power draw was attractive. Nvidia's adoption of Arm CPUs in its rack-scale AI infrastructure systems further raised the chips' profile in the industry.

"Until five years ago, it was a one-horse race: It was Intel or Intel," said Patrick Moorhead, founder, CEO and chief analyst at Moor Insights & Strategy. "Once AWS adopted Arm for Graviton, that set into motion the entire industry building open source stacks on top of Arm, and what used to be a second-class citizen, now it's native. If you're an enterprise, you're likely using Arm and you don't even know it."

Arm's AI CPU moment

Meanwhile, over the last year, agentic AI and AI infrastructure began moving out of the hyperscaler and frontier lab realm and into enterprises, as concerns about costs and governance prompted companies to consider bringing AI inference workloads in-house. Vendors such as IBM and Red Hat also propose that enterprises run a mix of lighter-weight and small language models on CPU hardware to contain AI infrastructure costs. And whether cloud-based or on-premises, AI inference and agentic AI workloads increasingly call for CPUs rather than the more powerful, expensive and scarce GPUs that AI model training had used.

These trends and Arm's trajectory fully intersected in March 2026, when Arm launched its AGI CPU for AI infrastructure, which the company's

Arm chips in spotlight amid AI infrastructure cost concerns

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