Arm now makes its own chips

Arm, one of The world’s largest chip design companies announced on Tuesday that they are producing their own chips Semiconductors. The move is a departure from its old model Intellectual property licensing For companies that make and sell chips themselves. Speaking to a live audience in San Francisco, Arm CEO Rene Haas gave his pitch on how the new Arm CPU could benefit the tech industry and why this is the right time for the company to get out of the way and go head-to-head with other chip makers.

Arm’s internal chip efforts have been rumored for years. Now, with AI spreading throughout the economy and demand for computing resources skyrocketing, Arm is trying to capture a slice of the market for central processing units (CPUs) optimized to handle AI workloads.

The new chip is called the Arm AGI CPU, in reference to this Artificial general intelligencean often invoked but still virtual form of artificial intelligence that can match human performance across domains. It is designed to be integrated with other chips in high-performance servers inside data centers and to handle artificial intelligence tasks. The chip is manufactured by Taiwan Semiconductor Manufacturing Company, a leading global semiconductor manufacturer Leading semiconductor foundryand is built using TSMC’s 3nm process.

At the chip’s unveiling event, Arm executives emphasized the company’s history of designing power-efficient chips and claimed that its new AGI CPU would be “the most efficient CPU on the market in the world.” Compared to competitors like the latest x86 chips made by Intel and AMD, Arm says this chip will provide better performance per watt, or the amount of power a computer uses to operate, and could save customers billions of dollars in electricity spending.

The first major customer for Arm’s new chip is Meta, which the company says has received samples of the CPU. OpenAI, SAP, Cerebras, and Cloudflare, as well as Korean technology companies SK Telecom and Rebellions, have also agreed to buy the chip. Arm expects that its AGI CPU will reach “full production availability” in the second half of this year.

Nvidia CEO Jensen Huang, Amazon senior vice president and distinguished engineer James Hamilton, and Google AI infrastructure chief Amin Vahdat appeared in pre-recorded video testimonials praising the new Arm hardware. No one has committed to buying it, but all three tech giants are already using Arm’s designs in their own processors.

ARM’s history goes back to the late 1970s, when it was known as Acorn and produced microprocessors. In the 1990s, the company changed its name to ARM (Advanced RISC Machines) and its then-CEO began licensing the company’s chip designs to other companies. Arm, which has since dropped the all-caps “ARM” branding, saw its business boom during the mobile revolution. By the 2000s, many of the world’s largest technology companies, including Apple, Nvidia, Microsoft, Amazon, Samsung, and Tesla, were all relying on its technology.

Arm seemed eager at the press event to prove that it has the backing of bold names in the technology industry. While the company is mostly targeting chipmakers like AMD and Intel, which build CPUs based on a different architecture, it risks potentially alienating some of its longtime partners by launching its own chips. Nvidia, which primarily makes GPUs, also assembles Arm-based CPUs into its rack systems. Earlier this year, Nvidia It said it would sell standalone CPUs For the first time. Meta was one of the first buyers.

Arm could be viewed more as a competitor than a partner as its strategy evolves, says Ben Bajarin, CEO and principal analyst at research firm Creative Strategies. Bajarin notes that Arm is currently launching a simplified CPU that has a relatively small number of cores — the processing units built into the chip — and is specifically designed to power AI agents. Over time, Arm may expand to include more general-purpose CPUs, while AMD and Intel develop chips specifically designed for agentic AI. This would put companies in more direct competition with each other.