Arm Unveils First In-House AI Chip, Projects $15 Billion Revenue
Arm introduces its first custom AGI CPU for data center AI inference, aiming for $15 billion in revenue from the chip alone by 2031. The move marks a historic shift as the company now competes directly with its former licensees.
Arm shares surge 16% after the company reveals its first-ever internal chip, the AGI CPU, at an event in San Francisco. Designed specifically for AI inference in data centers, the new processor addresses the surging demand for computing power driven by agentic AI. Meta stands as the first official customer for this groundbreaking hardware.
The chip represents a massive strategic pivot for the British firm, which traditionally licenses its instruction sets to other companies and collects royalties. By manufacturing its own server chip, Arm now competes directly with its longtime customers, including Amazon, Microsoft, Nvidia, and Google. Citi analysts call this move the most significant shift in the company's history.
Arm's CEO Rene Haas projects the new chip alone will generate $15 billion in revenue by 2031, helping drive total annual company revenue to $25 billion. This expected revenue is six times the $4 billion the company generated in 2025. Analysts note these impressive forecasts should alleviate investor concerns about changes to the company's margin structure, as the projected profits heavily outweigh the costs of in-house manufacturing.