Intel's data center strategy for ARM is greater integration density.
For example, in less than a year Intel will be selling a Xeon socket compatible chip with 72 Atom cores with the same power envelope as a normal Xeon server chip. And each core will have two 512-bit vector pipelines (AVX3?), so the throughput for compute intensive operations should be impressive. It will undoubtedly be expensive but if you look at the overall dollars per compute, and how many VMs and similar you could run on it simultaneously, it starts to look very attractive in terms of data center economics.
For example, in less than a year Intel will be selling a Xeon socket compatible chip with 72 Atom cores with the same power envelope as a normal Xeon server chip. And each core will have two 512-bit vector pipelines (AVX3?), so the throughput for compute intensive operations should be impressive. It will undoubtedly be expensive but if you look at the overall dollars per compute, and how many VMs and similar you could run on it simultaneously, it starts to look very attractive in terms of data center economics.