The recent report from Reuters about Nvidia looking to make a push with an Arm PC chip has been a long time coming. We have known about Nvidia’s interests in this space for several years as a part of a broader CPU roadmap on Arm moving from data center to PC.  The report also highlights AMD’s intent for an Arm-based CPU, which we believe is not in the works.  We will share some thoughts essential to know related to this topic.

First, competition in Windows client PC chips is coming, and it is a net positive for the market. Windows PCs running Arm are still a very small sliver of the overall PC market, under 2% of the annual sales share. But the emerging opportunity is around AI as Arm has a more mature NPU, and from what we can tell, Arm-based players will have a significant lead over x86 players in terms of the core metric that matters for AI performance on-device, which is TOPS. That said, the two factors in how many silicon providers can offer a solution on Windows are Microsoft themselves, who will need to bless any new entrants, and the market’s ability to embrace more than the three current Windows silicon providers. We believe quite strongly Microsoft understands the PC market can not support too many silicon providers and thus will limit it to the core three in Intel, AMD, and Qualcomm.

The Nvidia solution still may not come to market.  Nvidia has much bigger fish to fry as they race to meet current demand for their data center solutions, and in no way would a small sliver of the PC market take priority over the cash cow they are sitting on in the data center. Even if this part comes to market, we believe it would be isolated to the high-end gaming segment, which is, again, a very small market.

For AMD, they have little reason to switch away from x86 with an offering. They are still struggling to gain share in client with their own x86 solution against Intel, and an Arm solution would not change that reality.  x86 has a dominant position in the enterprise, and we are still skeptical of the Arm PC opportunity in the enterprise specifically. An Arm-based offering from AMD would not help either their x86 strategy for the enterprise.

The key point here that is important to get across, is the market’s inabilty to support this many PC vendors. OEMs have significant costs to add a new silicon vendor to their supply chain and they will only do that when the market opportunity is large enough. Intel remains the entrenched encumbant here with still ~80% share on average and while AMD and Qualcomm have a chance to chip away at that but how much is a question only the market will answer.

We remain cautiosly optomistic on the Arm Windows PC opportunity, particiularly as we enter the era of the AI PC which we believe could be a strong catalyst for the PC market to return to growth and leap forward as a productivity tool.

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