Semiconductor design firm Arm surprised the hardware industry on Feb. 13 with the announcement that it will make a server CPU as well as license its semiconductor designs to other organizations; Meta locked in as the first partner. The move turns Arm from a resource for companies like Qualcomm and NVIDIA into a potential competitor.
According to the Financial Times, Arm Chief Executive Rene Haas could show the new chip by the summer.
Arm plans to make a chip for servers in large data centers
Specifically, Arm will develop and sell its own CPU intended to reside in servers for large data centers. The processor will have a base architecture customizable to different customers. More details about the chip’s capabilities were not available at the time of writing.
Arm won’t do the manufacturing; like many major semiconductor producers, the chip will be manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC). Also, Arm has recruited personnel from its customers, according to Reuters.
SEE: Data centers can reduce energy usage by changing just 30 lines of code in the Linux kernel network stack, a team from the University of Waterloo found.
Arm makes most chips in leading smartphones, seeks to expand AI production
Arm, which SoftBank owns, holds a critical space in the semiconductor industry as a design company that licenses its blueprints out to the tech giants that handle the implementation and manufacturing.
Most of the world’s smartphones include chips designed inside Arm. For example, the Samsung Galaxy S24 and Google Pixel 8 both use AI-capable CPUs based on Arm designs. Apple’s M-series chips found in iPhones are based on Arm designs.
SoftBank founder Masayoshi Son plans to leverage Arm to build an AI production pipeline, the Financial Times said. SoftBank is also financing the Stargate project, a U.S.-based initiative to build out AI infrastructure along OpenAI, Microsoft, and NVIDIA.
Arm is based in Cambridge, England.
Arm’s chip competes with hardware powerhouses
Arm’s partnership with Meta could disrupt some business for other major companies in server chips, such as Intel and AMD. Arm has already pulled ahead of Intel in the AI age because its CPUs are relatively energy efficient. Energy efficiency can make or break data center plans in the days of resource-guzzling AI workloads.
Selling its own chip puts Arm in direct competition with one of its customers: Qualcomm. Arm and Qualcomm have been embroiled in a legal battle, resulting in a win for Qualcomm in December 2024. Arm alleged Qualcomm’s use of Nuvia processors, which Qualcomm began to use after acquiring Nuvia, violated the terms of Nuvia’s licenses regarding Arm chips. However, jurors were undecided on whether Nuvia actually broke its licensing contract with Arm; therefore, the case might go to another trial.
Arm’s step into making a CPU product overlaps with NVIDIA’s customer base, although NVIDIA is known best for GPUs. NVIDIA attempted to buy Arm in 2020 but was thwarted by antitrust regulators. NVIDIA still has a financial stake in Arm and uses Arm for some of its designs.
