Arm to Directly Sell Its Own AI Chips...Direct Confrontation with Nvidia

Arm to Directly Sell Its Own AI Chips...Direct Confrontation with Nvidia

From customer to competitor...SoftBank accelerates its 'post-Nvidia' strategy

British semiconductor design company Arm is transitioning its business to directly supply complete artificial intelligence (AI) chips, intensifying its competition with Nvidia.

According to the British Financial Times (FT), Arm announced during its earnings call on the 7th (local time) that the combined revenue from its self-developed data center chip 'AGI CPU' for the 2027-2028 fiscal years is expected to reach $2 billion (approximately 2.9 trillion Korean won). This is double the forecast provided at its launch in March.

Arm has historically operated by providing semiconductor design intellectual property (IP) to companies like Nvidia, Google, and Amazon. Established in November 1990, Arm is now, for the first time in over 35 years since its founding, directly releasing its own complete chips, putting it in direct competition with its existing customers.

The industry views Arm's transition as a potential game-changer that could disrupt the AI data center infrastructure market.

CEO Rene Haas stated that demand for the AGI CPU 'exceeded expectations' and that 'Arm has established itself as the computing platform for the AI era.' Haas had previously predicted in March that the new chip would be a driving force for a five-fold increase in revenue over the next five years.

Haas also predicted today that the demand for CPUs, essential for running AI applications, would quadruple. While demand initially focused on GPUs for model training during the early AI boom, CPUs are now becoming increasingly important for AI inference and agent operation. This is also the reason why CPU powerhouses like Arm, AMD, and Intel are emerging as new beneficiaries.

This move aligns with SoftBank Chairman Masayoshi Son's 'Izanagi Project,' a strategy to build an AI semiconductor supply chain that competes with Nvidia. Haas was also appointed CEO of SoftBank International Group last month, taking on a key role in this strategy.

Arm's revenue for the quarter ending March was $1.5 billion, meeting Wall Street expectations. The current quarter's revenue forecast of $1.26 billion exceeded market expectations ($1.2 billion). The stock price surged 10% today and has more than doubled since the beginning of the year.