"There are evolutionary pressures that drives you when you are going after servers compared to handhelds," McCarron said.

Companies like SeaMicro and Dell are building servers based on Intel's low-power Atom processors, but Nvidia's entry could fuel more interest in ARM servers. Nvidia's competitors will be Marvell, which last year announced a 1.6GHz quad-core ARM-based server chip, and Calxeda, which has built a server chip based on a quad-core ARM processor.

A big hurdle to entering the server market for ARM is software compatibility, as most of data-center code is written for x86 servers. A lot of IT implementations require corresponding server- and client-level compatibility, but x86 binary compatibility is less of a concern for Nvidia's future server chips delivering cloud services, Scott said.

"In the back room, in the cloud, binary compatibility doesn't matter nearly so much either," Scott said. "They are providing a service over the Web and they can switch to ARM, that is more power efficient."

The software stack is less of a worry on the server side than it is on the client side, where they could be issues around compatibility, McCarron said.