Arm Holdings licenses technology to semiconductor designers that powers nearly all mobile phones and many other products. Now, it has a chip of its own to sell.
The company, a British unit of Japan’s SoftBank, on Tuesday announced plans for the first silicon product that Arm will design and sell since its founding in 1990. It is a microprocessor aimed at data centers running artificial intelligence tasks.
Meta, Facebook’s parent company, helped develop the chip and signed up as its first user. Other early customers will include OpenAI, the A.I. pioneer, Arm said.
Arm’s new offering marks a drastic change in its business model. The company helped pioneer the concept of selling intellectual property rather than products, charging fees and collecting per-chip royalties from hundreds of companies that license Arm’s underlying microprocessor architecture or the equivalent of blueprints to design chips.
Pierre Ferragu, an analyst with New Street Research, called Arm’s shift to selling chips “the most significant strategic pivot in the company’s history.”
Nvidia, which has become the most valuable publicly traded company in the world thanks to its A.I. chips, has focused attention on chips it sells that handle specialized, number-crunching tasks essential to the development of A.I. systems.
But microprocessors that handle other tasks are becoming more important as tech companies provide so-called A.I. agents — technology that can automate a wide array of tasks. Jensen Huang, Nvidia’s chief executive, recently predicted that such chips would become a multibillion-dollar business for the company.
Arm’s shift risks angering some of its biggest licensees, some of which could become rivals as well as customers. Besides Nvidia, Arm’s customers include Qualcomm and major A.I. players such as Amazon, Microsoft and Ampere, whose chips are used by Oracle. All of them have been developing Arm-based chips.
Mohamed Awad, Arm’s executive vice president for cloud A.I., downplayed the notion of competing with its customers. For one thing, its new product targets tasks in A.I. computing that only a few cloud giants can afford to design for their own needs.
“You can’t go buy a product in the market like this today,” Mr. Awad said. “Meta and others have asked us to go off and build this thing.”
But Jim McGregor, an analyst with Tirias Research, said some tension with customers was unavoidable as Arm faced pressure to raise its revenue beyond what its licensing business could support.
“Arm has an aggressive strategy to increase its revenue,” Mr. McGregor said. “That doesn’t necessarily make everybody happy.”
Arm’s plan to sell its own chips was reported by The Financial Times in February 2025. But the company had been considering the step for years, Rene Haas, Arm’s chief executive, testified in a federal court trial in December 2024 stemming from a lawsuit Arm brought against Qualcomm over licensing terms concerning a start-up the San Diego-based company purchased. A federal judge in Delaware ruled for Qualcomm in the case in September.
The new product announced Tuesday, the Arm AGI CPU, has up to 136 computing elements, known as cores, offering what the company called an extreme boost in calculations per watt of energy used. Mr. Awad estimated that switching to the technology could save $10 billion when building one of the latest giant A.I. data centers, which can cost as much as $50 billion.
He said potential customers had received samples of the chip and should be using it for computing jobs by the end of the year.
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