Arm Holdings is making a major shift in its business by planning to sell its own chips for the first time. The company, which has long focused on designing and licensing chip architectures used by firms like Apple, Qualcomm, and Amazon, is now moving into direct chip sales. This change comes as demand for AI-focused data center hardware grows rapidly. And by launching its own processors, the chip designer aims to capture a larger share of the AI chip market instead of relying mainly on licensing and royalties.
The company has introduced a new data center processor, known as the AGI CPU, aimed specifically at AI workloads. Manufactured using cutting-edge 3-nanometer technology by TSMC, the chip is designed to deliver high performance and energy efficiency at scale. With configurations reaching well over 100 cores and the ability to scale into thousands of cores in large server deployments, the processor is customized for hyperscale data centers where efficiency, density and compute power are essential.
The firm is not pursuing this strategy alone. This latest initiative is backed by a broad ecosystem of partners across the technology industry. Companies like Meta have been involved in development, while firms including OpenAI, SAP, SK Telecom and Cloudflare are part of the wider ecosystem expected to adopt and support the platform. At the same time, hardware manufacturers like Lenovo and Supermicro are also preparing systems built around Arm-based designs, indicating early industry momentum.
“More than 50 leading companies across hyperscale, cloud, silicon, memory, networking, software, system design and manufacturing are supporting the expansion of the Arm compute platform into silicon,” Arm said.
The launch comes as the nature of AI systems is changing. While graphics processors from companies like Nvidia have led the boom in AI training, CPUs are becoming increasingly important for coordinating complex workloads, handling memory, and running inference pipelines. Even the rise of ‘agentic AI’ has further increased demand for powerful, highly scalable CPUs. Therefore, Arm is positioning its new chip as a key part in this next generation of AI infrastructure, where CPUs and GPUs work together to enable large-scale intelligent systems.
Financially, Arm enters this transition from a position of strength. The company has been experiencing steady growth, with revenue of about $4.0 billion for fiscal 2025, representing around 24% year-on-year growth. However, despite all such potential, the latest shift comes with some significant risks. By selling its own chips, Arm could weaken ties with major customers like Apple and Amazon, who rely on its designs for their own custom processors. The company is also entering a highly competitive market with strong players like Intel, AMD, and Nvidia. Additionally, major cloud providers are increasingly designing their own chips, which further intensifies competition.
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