Nvidia Vera Adoption
Nvidia has earned billions selling AI accelerators, but with the emergence of agentic AI, CPUs are going to play a considerably more significant role than before, creating new opportunities for the company. Nvidia has secured a major design win with its Vera CPUs with AI cloud provider Modal. According to Modal, preliminary evaluations showed that Vera could deliver twice the throughput of its existing AMD and Intel processors, although the company does not intend to cease using CPUs from its current suppliers.
Arm Architecture Transition
Modal provides cloud infrastructure that enables AI developers to deploy AI agents that can perform complex operations autonomously over extended periods. Such workloads require substantial CPU resources for software execution, data processing, and other tasks that cannot be efficiently handled by GPUs. Modal currently relies exclusively on AMD and Intel processors for these operations, but its tests indicate that Nvidia's new Vera CPUs could significantly improve performance in its specific workloads. Because Vera is based on an Arm instruction set architecture, Modal's decision to adopt Vera will require substantial modifications to its software, though the company believes the potential performance improvements justify the engineering effort.
Performance and Workloads
The reported 2x throughput advantage is particularly interesting because agentic AI workloads can involve numerous independent tasks that compete for CPU cores, cache capacity, and memory bandwidth. However, Modal has not disclosed detailed benchmark configurations, specific AMD and Intel processor models, or performance-per-watt figures. Consequently, it remains unclear whether Vera's advantage stems from its Arm v9.2-based Olympus CPU cores, its memory subsystem with 1.2 TB/s of bandwidth, or other architectural characteristics. These tests compared Vera against currently available AMD and Intel processors rather than upcoming generations.
Heterogeneous Server Fleet
Since Modal cannot port all of its software to the Arm ISA overnight, the company will continue using x86 CPUs from AMD and Intel, according to Modal chief executive Erik Bernhardsson. Rather than sticking to one ISA for everything, Modal intends to operate a heterogeneous server fleet and select the most suitable processors for each workload. The company also intends to evaluate upcoming AMD and Intel processors once they become available.
Market Impact
For Nvidia, the agreement represents a major step toward making Vera a standalone server processor that commands a major share of the server market. The company expects Vera sales to generate at least $20 billion during its current fiscal year and estimates the potential total available market for these CPUs is approximately $200 billion, putting it on track to sell at least four million Vera CPUs.
The announcement follows Modal securing $750 million in financing led by Accel, valuing the company at $15.75 billion. Modal expects its annual revenue to reach $1 billion within the next year, with service consumption having increased threefold in the last 12 months.
