GoKawiilFor more than 35 years, Arm Holdings has licensed its instruction sets to the world's biggest chipmakers and collected royalties on every processor made with its designs. Now the U.K.-based company is making physical silicon of its own for the first time.
Arm CEO Rene Haas unveiled his company's first in-house chip on Tuesday at an event in San Francisco. Arm is calling the new data center central processing unit the AGI CPU. It's a long-anticipated move that marks a major change for the so-called Switzerland of chip firms as it enters into fresh competition with its customers.
Meta is the first to sign on, as the social media company builds out multiple gigawatts of AI data centers and plans to shell out up to $135 billion on capital expenditures this year. In February, Meta secured a huge amount of chips from both Nvidia and Advanced Micro Devices .
"In today's world, you really only have a couple of players," said Meta software engineer Paul Saab, who helped with the Arm chip project since its start in 2023, in an interview with CNBC. "This adds yet another player to the ecosystem for us."
Saab added that the Arm deal "allows a lot more flexibility in our software stack and in our supply chain."
Terms of the agreement weren't disclosed. For Arm, the deal marks a major win and a stamp of approval from one of the most valuable companies in the world.
"Let's say they get 5% of Meta's $115 to $135 billion capex going into the future," said chip analyst Patrick Moorhead of Moor Insights. "That is a game changer on the top line for them."
It's also the latest sign that CPUs are seeing a resurgence in demand. Nvidia, which has established itself as the leader in AI graphics processing units, recently told CNBC that CPUs are "becoming the bottleneck" as agentic AI changes compute needs. Futurum Group calls it a "quiet supply crisis," predicting the CPU market growth rate could exceed GPU growth by 2028.
While GPUs are ideal for training and running AI models because their thousands of cores can perform many operations simultaneously, CPUs have a smaller number of powerful cores running sequential general-purpose tasks. Agentic AI requires a lot of general compute power, with large amounts of data moving around across multiple agents.
At Nvidia's annual GTC conference last week, CEO Jensen Huang unveiled an entire rack filled only with Vera CPUs. At the Arm event on Tuesday, Huang appeared in a recorded statement congratulating Arm on its new CPU.
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