Nvidia targets $200 billion server CPU market with Vera processor launch
CFO Colette Kress outlines $20 billion revenue projection for 2027 as hyperscalers shift to energy-efficient inference workloads.
Nvidia has signalled its intent to disrupt the server central processing unit (CPU) market, announcing plans to release its next-generation Vera processor as a standalone product. The move, revealed during the company’s fiscal 2027 first-quarter earnings release on May 20, marks a strategic expansion beyond its established dominance in graphics processing units (GPUs) for artificial intelligence training.
Chief Financial Officer Colette Kress stated that the Vera CPU opens a total addressable market (TAM) valued at $200 billion, a segment Nvidia has not previously addressed as a standalone supplier. The company projects $20 billion in total CPU revenue for 2027, aiming to capture a significant share of the market currently led by AMD and Intel.
The shift towards standalone CPUs is driven by the evolving nature of AI compute. As the industry moves from training large language models to inference workloads, demand has grown for energy-efficient processors. While Nvidia’s previous Grace CPU was designed to pair with GPUs in rack-scale systems, the new Vera architecture leverages Arm technology, which hyperscalers are increasingly adopting to reduce costs and improve efficiency.
Current market leaders AMD and Intel rely on x86 architecture. AMD reported a 57 per cent year-over-year increase in data centre revenue to $5.8 billion in the first quarter, while Intel saw a 22 per cent rise to $5.1 billion, citing strong demand for its Xeon processors. Nvidia’s entry into this space challenges these incumbents, with management claiming visibility to nearly $20 billion in CPU revenue for the current fiscal year.
Industry data suggests a rapid transition in architecture preferences. Counterpoint Research forecasts that Arm-based server CPUs will account for 90 per cent of the AI data centre market by 2029, up from just 15 per cent of the broader data centre CPU market a year ago. Nvidia’s strategy aligns with this trend, positioning the Vera processor to capitalise on the growing preference for Arm architecture among major system makers and hyperscalers.
