The chip design firm says Meta, OpenAI, Cerebras, and Cloudflare are among the first customers of its new artificial intelligence hardware.
Arm’s in-house chip efforts were rumored for years. Now, as artificial intelligence proliferates throughout the economy and demand for computing resources skyrockets, Arm is trying to capture a sliver of the market for central processing units optimized to handle AI workloads.
The new chip is called the Arm AGI CPU, a nod to artificial general intelligence, an often-invoked but still hypothetical form of AI that could match human performance across domains. It’s designed to be coupled with other chips in high-performance servers inside data centers and to handle agentic AI tasks. The chip is being fabricated by Taiwan Semiconductor Manufacturing Corporation, the world’s leading semiconductor foundry, and is being built using TSMC’s 3nm process. At the chip reveal event, Arm executives emphasized the company’s history of designing energy-efficient chips and claimed that its new AGI CPU will be the world’s “most efficient agentic CPU on the market.” Compared to competitors like the latest x86 chips made by Intel and AMD, Arm says this chip will deliver better performance per watt, or the amount of energy a computer uses to operate, and could save customers billions of dollars in electricity spending. The first major customer of Arm’s new chip is Meta, which the company says has received samples of the CPU. OpenAI, SAP, Cerebras, and Cloudflare, as well as the Korean tech firms SK Telecom and Rebellions, have also agreed to buy the chip. Arm projects 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 pretaped video testimonials praising Arm’s new hardware. None committed to buying it, but all three tech giants already use Arm’s designs in their own processors. Arm’s history traces back to the late 1970s, when it was known as Acorn and produced microprocessors. In the 1990s the entity changed its name to ARM and its then-CEO began licensing the firm’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 2010s many of the world’s largest tech companies, including Apple, Nvidia, Microsoft, Amazon, Samsung, and Tesla, were all relying on its technology. Arm appeared eager at the press event to demonstrate it has support from bold-faced names in the tech industry. While the company is mostly taking aim at chipmakers like AMD and Intel, which build CPUs based on a different architecture, it risks potentially alienating some of its longtime partners by releasing its own chip. Nvidia, which primarily makes GPUs, also bundles Arm-based CPUs into its rack systems. Earlier this year, Nvidia said it would sell stand-alone CPUs for the first time. Meta was one of its first buyers. Ben Bajarin, CEO and principal analyst at the research firm Creative Strategies, says that Arm could be perceived more as a competitor than partner as its strategy evolves. Right now, Arm is launching a streamlined CPU with a relatively small number of cores—the chip’s built-in processing units—designed specifically for running AI agents, Bajarin points out. Over time, Arm may expand into more general-purpose CPUs, while AMD and Intel develop chips tailored for agentic AI. That would put the companies in more direct competition with one another. But at the moment, Bajarin says, Arm is simply trying to get in on the fast-growing market for data center CPUs. Creative Strategies forecasts that demand for such chips will grow from $25 billion this year to $60 billion globally by 2030. That figure represents only CPUs for traditional cloud computing data centers. When CPUs for agentic AI are factored in, Bajarin’s demand estimate jumps closer to $100 billion by 2030. Even if Arm captures only a sliver of that, it could be a significant source of revenue for the company. This is a developing story. Please check back for updates.
Semiconductors Chips Data Centers Artificial Intelligence
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