5% of the cloud now runs on Arm as chip designer plans 2023 IPO

Growing indication power-sipping CPUs are catching on in crowded datacenters

Three major hyperscalers – AWS, Microsoft Azure and Google Cloud – deliver as much as five percent of their compute services using Arm CPUs.

This revelation was disclosed on Tuesday amid SoftBank's Q3 2023 earnings call (SoftBank owns Arm).

"In the space of cloud, initially, the share was zero percent. But we're working with Amazon, Google and Microsoft, those big cloud players, which have adopted Arm's chip technology. So accordingly, Arm has grown market share from 0 percent to 5 percent," said SoftBank CFO Yoshimitsu Goto.

According to Synergy Research Group and Statista, the trio represent 66 percent of the global cloud infrastructure market in the three months ending September 30.

The market research firm tallied the industry at $217 billion for the 12 months prior – so if the top three clouds hold two thirds of that market they're collectively raking in around $7 billion from Arm-powered servers. And let's not forget that Alibaba and Oracle also offer Arm-powered servers, and hold five and two percent market share respectively.

Whatever the true number is, five percent of the cloud market going to Arm represents an erosion of the market for existing players and a growing industry-wide indication that the power-efficient Arm CPUs could be the right solution in crowded datacenters.

AWS, for one, has aggressively marketed its home-brewed Graviton CPUs, the most recent of which 2021's Graviton3 includes 64 ARM-compatible CPU cores and employs the company's 256-bit Scalable Vector Extensions.

Arm won $746 million of revenue in the third quarter of fiscal 2022, a rise of 28 percent year-on-year. Meanwhile, SoftBank reported a net loss of $5.9 billion, thanks to the myriad startups it supports and their falling valuations.

Segments where Arm gained market market share include mobile, in which the company said share grew from 90 percent in 2016 to 95 percent in 2021; IoT, which grew 30 percent to 63 percent; and automotive from 10 percent to 24 percent.

The confidence is clear. Arm CEO Rene Haas told Reuters on Tuesday that the company was committed to a stock market float this year.

Haas referred to the IPO plans as "well developed and under way."

"We're doing everything we can and are committed to have it happen this year," said the exec. ®