British chip architecture designer Arm (NASDAQ:ARM) expects its global market share in data center central processing units to grow to 50% by the end of 2025, compared to 15% in 2024, with gains steered by a boost in AI, Reuters reported, citing a company executive.

Shares of Arm fell about 4% premarket on Monday.

In many cases, Arm's technology offers lower power consumption than processors made by Intel (INTC) and Advanced Micro Devices (AMD), said Mohamed Awad, Arm's infrastructure chief, to the media outlet, as per the report.

Arm did not immediately respond to a request for comment from Seeking Alpha.

Awad noted that data center chips often use more of Arm's intellectual property and the company usually receives "a lot higher aggregate royalty rate" than chips for less complex devices, according to the report.

Arm does not make chips itself but sells and licenses the building blocks and intellectual property to companies, including Apple (AAPL) and Nvidia (NVDA), for use in designing chips for smartphones, laptops, and data center processors.

"We've gotten to the point where software is actually being developed for Arm first and foremost," Awad noted.

In December last year, Amazon (AMZN) said its self-built data center CPUs with Arm tech accounted for over half the capacity for chips it added over the past two years, the report added.

Microsoft (MSFT) and Alphabet's (GOOGL) (GOOG) unit Google have also made Arm-based data center chips, though their efforts are more recent than Amazon's, the report noted.

Last month, Arm's fiscal fourth-quarter outlook came in line with estimates but royalties missed expectations. However, the third-quarter results had drawn praise from Wall Street analysts.