The company said the new venture could generate around $15 billion in annual revenue within five years, News.Az reports, citing Bloomberg.
The UK-based firm announced that Meta Platforms will be the first major customer for its new processor, an AGI-focused CPU, unveiled at an event in San Francisco. The chip is expected to feature up to 136 cores and consume about 300 watts of power. Manufacturing will be handled by Taiwan Semiconductor Manufacturing Company.
As part of the strategy shift, Arm outlined ambitious financial goals, aiming for total annual revenue of roughly $25 billion within five years—about five times its current level. The company expects its new chip division to surpass its existing intellectual property business, which it projects will still grow to around $10 billion over the same period.
The announcement boosted investor confidence, with Arm shares rising as much as 7.8% in late trading. Shares of SoftBank Group, which holds a majority stake in Arm, also climbed 8.6% in Tokyo. Arm’s valuation plays a key role in SoftBank’s broader investment strategy, including bets on OpenAI and data center expansion.
Under CEO Rene Haas, Arm has been expanding beyond its traditional smartphone-focused roots into the data center market, where chip prices—and potential profits—are significantly higher. While smartphone chips typically sell for tens of dollars, high-end data center semiconductors can reach tens of thousands.
Chief Financial Officer Jason Child noted that although licensing and design services currently offer higher margins, producing full chips could deliver greater total profits. For example, Arm earns about 5% from licensing its instruction set on a $1,000 chip, around $100 when customers use its designs, and up to $500 in gross profit if it manufactures the chip itself.
The new CPU is designed to complement accelerator chips from companies such as Nvidia, handling coordination tasks, data preparation, and elements of AI query processing. Arm also claims the product will deliver better power efficiency than competing CPUs from Intel and Advanced Micro Devices, allowing data centers to achieve more computing power within the same energy limits.
Arm’s move into chip production positions it as a direct competitor to traditional x86-based data center offerings from Intel and AMD. The company believes the rapidly growing market can support multiple players while enabling both Arm and its customers to expand.
