Arm reveals new AI chip, expects billions in annual revenue

Arm Holdings unveiled a new artificial intelligence data center chip on Tuesday, stating that it will generate billions of dollars in revenue and mark a significant shift in the company's strategy.

The new chip, called the AGI CPU, will address data-crunching needed for a specific type of AI that is able to act on behalf of users with minimal oversight, instead of responding to queries as part of a chatbot, News.Az reports, citing Reuters.

So-called agentic AI ​has jump-started demand for the central processing units (CPUs) produced by the likes of Intel and Advanced Micro Devices 
Arm shares ​jumped 6.5% in the extended session after the company issued its financial projections. Arm stock closed ⁠down 1.4% on Tuesday and have advanced 22% this year.

For years, Arm, majority-owned by Japan's SoftBank Group has relied only ​on intellectual property for revenue, licensing its designs to companies such as Qualcomm and Nvidia collecting a royalty payment ​based on the number of units sold.

Last year, Arm signaled to investors it was investing in making its own chip, a process that can co and thenst hundreds of millions of dollars, and that the company had hired key executives to assist with the effort. The AGI CPU will be the ​first chip under that new strategy.

"It's a very pivotal moment for the company," CEO Rene Haas said in an interview ​with Reuters.

Arm, is forecasting the new chip will generate roughly $15 billion in annual revenue in about five years, Haas said.

Overall, Arm expects to ‌generate annual ⁠earnings per share of $9 and revenue of $25 billion, also in five years, he said.

Haas said the company expects the intellectual property business to double over roughly five years.

The new chip will be overseen by Mohamed Awad, head of the company's cloud AI business, and Arm has additional designs in the works that it plans to release at 12- to 18-month intervals.

News.Az 

By Ulviyya Salmanli