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Arm Unveils AGI CPU for AI Data Centres, Forecasts Billions in Revenue

  • 12 hours ago
  • 2 min read

Arm Holdings announced a new artificial intelligence data centre chip, the AGI CPU, marking a significant shift in the company's strategy. This new chip is expected to add billions of USD in annual revenue.


Close-up of a microchip with "AI" text, surrounded by a complex circuit board. Silver and gold tones dominate the intricate design.
Credit: UNSPLASH

The AGI CPU will address data-crunching requirements for agentic AI, a type of AI capable of acting on behalf of users with minimal oversight. This differs from AI that primarily responds to queries as part of a chatbot.


Arm, majority-owned by SoftBank Group, previously relied on licensing its intellectual property to companies such as Qualcomm and Nvidia. It collected royalty payments based on the number of units sold.


The company signalled its investment in making its own chips, a process that can cost hundreds of millions of USD. It also hired key executives for this effort. The AGI CPU is the first chip developed under this new strategy.


Chief Executive Officer Rene Haas described this as a "very pivotal moment for the company." Haas stated that Arm forecasts the new chip will generate roughly USD 15 billion in annual revenue in about five years.


Overall, Arm expects to achieve annual earnings per share of USD 9 and revenue of USD 25 billion in five years. Haas also indicated that the intellectual property business is expected to double over approximately five years.


Mohamed Awad, head of the company's cloud AI business, will oversee the new chip. Arm has additional designs in development, with plans for releases at 12- to 18-month intervals.


Meta Platforms is the lead partner for the AGI CPU, having collaborated with Arm on its design. Other customers for the new chip include OpenAI, Cloudflare, SAP, and SK Telecom.


Taiwan Semiconductor Manufacturing is fabricating the device using its 3-nanometer technology. The chip is constructed from two distinct silicon pieces that function as a single unit.


Arm plans to commence volume production in the second half of this year, having already received test chips that operate as anticipated. Haas confirmed that the new chip "works, and it's doing everything we thought it would."


Beyond the chip, Arm is collaborating with server makers such as Lenovo and Quanta Computer to provide complete systems. Wall Street analysts anticipate Arm will generate a net profit of USD 1.75 per share on revenue of USD 4.91 billion for its current fiscal year, according to LSEG estimates.

  • Arm Holdings unveiled the AGI CPU, a new artificial intelligence data centre chip.

  • The AGI CPU supports agentic AI and represents a strategic shift for Arm to manufacture its own chips.

  • Arm forecasts the AGI CPU will contribute USD 15 billion to annual revenue within five years.


Source: REUTERS

 
 
 

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