The growth in agentic AI software will lead to high demand for CPUs in the AI era, believes investment bank UBS. In an investment note, the bank explains that agentic AI increases the workload for processors. It adds that this workload typically favors firms that offer chips with higher cores and are able to cater to power efficiency. As a result, UBS outlines that in the era of agentic AI workloads, chips from Arm and then AMD are slated to benefit the most, with Intel also benefiting as the total addressable market (TAM) grows.
Agentic AI Workloads To Favor CPUs With Higher Core Counts & Power Efficiency, Says Investment Bank
Intel's latest earnings report led to its shares closing 23% as the chip maker delivered a major profit beat and CEO Lip-Bu Tan made a series of sensational remarks about the role of CPUs in catering to AI demand. As part of his prepared remarks for the conference call, Tan remarked that Intel was seeing "clear signs that the CPU is reasserting itself as the indispensable foundation of the AI era." Tan added that Intel's customers had told it that the "CPU now serves as the orchestration layer and critical control plane for the entire AI stack."
In its fresh coverage of British chip design house Arm, UBS shares that while CPUs are indeed seeing a resurgence, the nature of agentic AI computing will favor chips with a higher core count and a tilt towards power efficiency.
Arm, Then AMD, To Benefit The Most From Agentic CPU Demand Says Analyst
According to the bank, total server TAM could grow by five times through calendar year 2030 to $170 billion from the $30 billion in calendar year 2025. Within this TAM, the bank expects Arm to benefit the most and potentially capture as much as 40% to 45% of the total share.
To bolster its claims, the bank cites comments made by experts that it talked to which lead to three key themes that explain the surge in CPU demand. The first of these is a tilt of agentic AI workloads towards CPU cores which is expected to require a three to five times increase in CPU core counts per user and per GPU. Within servers, those with standalone CPUs will require more chips. As for agentic AI demand, the bank adds that agentics will push workloads to local PCs as is the case with Anthropic's Claude Code.
Consequently, the requirements for higher core count and power efficiency is expected to tilt the demand primarily towards Arm and then AMD, adds the investment bank. As for Intel, UBS outlines that the firm could cater to this demand through the Coral Rapids platform.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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