From CNBC, March 25:
- Arm’s shares jumped in premarket trading after CEO Rene Haas said it expects its newly released chip to generate $15 billion in annual revenue in 2031.
- The firm unveiled its AGI CPU chip on Tuesday, which is designed for AI inference in data centers.
- Amongst Arm’s first customers for its new chip include Meta, OpenAI, Cloudflare, and SAP.
Arm jumped in early market trading Wednesday after the company said its newly released in-house chip would generate $15 billion in revenue alone by 2031.
The British semiconductor and software design firm revealed its first-ever internal chip, the AGI CPU, at an event in San Francisco on Tuesday. The chip is designed specifically for AI inference in data centers, as demand for central processing units has surged with the rise of agentic AI.
The new chip is expected to generate $15 billion in revenue by 2031, with total annual revenue of $25 billion and earnings per share of $9, Arm’s CEO Rene Haas said at the event. The revenue expectation is six times more than the $4 billion it generated in annual revenue in 2025.
Arm was last up around 13.2% in premarket trading. The stock closed down 1.5% on Tuesday.
For decades, Arm has typically licensed its instruction sets to other companies and collected royalties on every processor made with its designs. However, with its new chip, it’s now competing with its own customers, including Amazon, Microsoft, Nvidia, and Google.
‘Significant shift’
Arm’s announcement is the “most significant shift in the company’s history,” Citi analysts said in a note on Wednesday. While the company’s move to manufacturing chips was a poorly kept secret, the news of the fully developed server chip, the support from major firms like Meta and OpenAI, and bullish revenue expectations, led to a positive suprise for the market, they said....
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