ARM servers overtake x86, AI infrastructure spending to reach $497B in '26: IDC

AI infrastructure spending reached $89.7B in the first quarter of 2026, and Arm (ARM)-based rack-scale GPU servers overtook x86 as the dominant accelerated computing platform, according to research firm IDC.

The x86 processors are made by Intel (INTC) and Advanced Micro Devices (AMD).

Outlook

IDC also raised its full-year 2026 forecast to $497B, representing nearly a 56% year-over-year increase, on hyperscaler capex growth and emerging non-GPU AI demand. The research firm now projects that the global AI infrastructure market will surpass $1T in 2029, reaching $1.08T, before climbing to $1.21T in 2030, a five-year compound annual growth rate, or CAGR, of about 30% from 2025.

Q1 Metrics

In the first quarter of 2026, the AI infrastructure spending surged 33% year-over-year but was flat sequentially as growth normalizes off a larger base.

The first quarter results confirm that AI infrastructure investment has moved beyond initial proof-of-concept phases into a sustained, multi-year capital commitment cycle while the competitive battle has shifted from how much compute gets bought to which platform wins it, the report noted. Enterprise technology buyers, cloud service providers, and national governments are making long-term decisions about where to build, how much to spend, and which AI workloads to prioritize.

Server spending was $87.6B, representing 97.6% of total AI infrastructure value in the first quarter of 2026, and within that, a growing share of AI-centric demand is landing on infrastructure that is not GPU-accelerated at all. AI orchestration tooling, data-pipeline workloads, and CPU-only inference clusters that hyperscalers are running as a cost-mitigation strategy alongside their GPU buildouts, the report added.

Non-x86 (Arm) accelerated server value jumped to $53B in the first quarter of 2026, up from $47.5B in the fourth quarter of 2025 and $29.8B in the third quarter of 2025. The x86 accelerated value fell to $34.6B in the first quarter of 2026 from $42.7B in the fourth quarter of 2025 and $51.9B in the third quarter of 2025.

"The Q1 2026 results make clear that AI infrastructure investment has entered a new phase where it’s not just about how much compute gets bought anymore, it’s about which platform wins it. We watched x86 accelerated servers fall from $52 billion to $35 billion in just two quarters while ARM rack-scale platforms nearly doubled, and that’s not demand destruction, that’s an architecture shift that is yet to be definitive as new x86 platforms are on the horizon as well. At the same time, we’re seeing genuine AI-driven demand show up in CPU-only inference clusters, AI orchestration tooling, and a storage refresh with a more AI-related flavor," said Juan Seminara, research director, Worldwide Infrastructure Trackers, IDC.

The report noted that the crossover, which started in the fourth quarter of 2025, reflects large buyers consolidating around Nvidia (NVDA) NVL72/GB200-class rack-scale platforms and redistributing volume away from custom x86 rack designs. Forecast will depend on how offerings evolve. Which platform ultimately prevails remains to be seen, as supply challenges across the industry persist, the report added.

Deferred storage investment is catching up. After redirecting the budget toward GPU and AI server spending for the past one to two years and treating storage refresh as postponable, enterprises can no longer put those purchases off, according to the report.

Pent-up storage refresh is now landing on top of genuine AI-driven demand, reinforcing the urgency behind external storage strategy even as AI-centric storage remains a small share (2.4%) of total AI infrastructure value, the report added.

Regional performance was mixed. The U.S. remained dominant at $67.9B with 75.7% of global spend, surging 30.3% year-over-year, though growth continues to moderate. China returned to growth at $7.8B with an 8.7% share, growing 9.3% year-over-year.

The Middle East, mainly Saudi Arabia and the UAE, again saw the strongest year-over-year growth globally in the first quarter of 2026, driven by government-backed sovereign AI initiatives and partnerships with leading hyperscalers, even as sequential spending pulled back from the fourth quarter of 2025’s record deal flow.

"While global economy and geopolitical tensions seem to slow down other markets, the AI investment pace continues showing an extraordinary resilience to the environment," said Seminara.

Shares of Arm and AMD fell about 2% premarket on Wednesday, while Intel declined nearly 3%.