Investment bank UBS believes that the rise of “agentic AI” software will lead to a high demand for CPUs in the AI era. In a recent investment note, the bank explained that agentic AI increases the workload on processors. This type of workload typically benefits chips with more cores and better power efficiency. As a result, UBS predicts that Arm and then AMD will benefit the most from agentic AI workloads, with Intel also seeing gains as the overall market grows.
Intel’s latest earnings report already showed a positive trend, with its shares closing 23% higher. This came after the chipmaker significantly beat profit expectations, and CEO Lip-Bu Tan made strong statements about the role of CPUs in meeting AI demand. During his conference call remarks, Tan noted that Intel was seeing “clear signs that the CPU is reasserting itself as the indispensable foundation of the AI era.” He added that Intel’s customers told him the “CPU now serves as the orchestration layer and critical control plane for the entire AI stack.”
In its new analysis of British chip design company Arm, UBS confirms that while CPUs are indeed making a comeback, the specific nature of agentic AI computing will favor chips that have a higher number of cores and prioritize power efficiency.
According to UBS, the total server market could grow fivefold by 2030, reaching $170 billion from $30 billion in 2025. Within this expanded market, the bank expects Arm to gain the most, potentially capturing as much as 40% to 45% of the total share.
To support its claims, UBS referred to comments from experts they consulted. These discussions highlighted three main reasons for the expected surge in CPU demand. First, agentic AI workloads lean towards CPU cores, which will likely require a three to five times increase in CPU core counts per user and per GPU. In data centers, servers with standalone CPUs will need more chips. Second, agentic AI demand will push some workloads to local PCs, similar to how Anthropic’s Claude Code operates.
Consequently, the need for more cores and better power efficiency is expected to primarily shift demand towards Arm, followed by AMD, according to the investment bank. For Intel, UBS suggests that the company could meet this demand through its Coral Rapids platform.
