Arm Releases New AI Chip, Targets Billions of Dollars!

JAKARTA - In the midst of a heated AI race, Arm Holdings has taken a step that could change the direction of its business: from just being the "brains behind the scenes" to a major player through its own AI chips.

The company, which is majority owned by SoftBank Group, officially launched an artificial intelligence-based data center chip called AGI CPU, which is claimed to contribute billions of dollars in revenue per year.

This is not just a regular upgrade. This chip is designed to support "agentic AI" - a type of AI that can act independently on behalf of users, not just answer questions like ChatGPT-style chatbots.

Arm CEO Rene Haas called this launch a crucial moment for the company. So far, Arm is known to rely on a chip design licensing business model to giants such as Qualcomm and Nvidia, then draw royalties from every device sold.

The new strategy marks a major shift: Arm is now going straight into the chip-making business - an expensive move that could cost hundreds of millions of dollars, but also open up the potential for much bigger profits.

The CPU AGI chip is being developed jointly with Meta Platforms as a key partner. A number of major technology companies have also been included in the initial customer list, including OpenAI, Cloudflare, SAP, and SK Telecom.

The production of this chip is entrusted to the Taiwan Semiconductor Manufacturing Company with a 3 nanometer fabrication technology - a cutting-edge level that is usually used for the most advanced chips today. The design is unique, consisting of two silicon parts that work as one integrated system.

Arm is targeting mass production to begin in the second half of this year. According to Haas, the trial chips that have been made show performance in line with expectations.

Not stopping there, Arm also partnered with server manufacturers such as Lenovo and Quanta Computer to provide complete computing systems based on these chips.

The move comes as CPU demand surges along with the rise of generative AI and agent-based AI, which is also driving competition with old players like Intel and Advanced Micro Devices.

In the market, the initial response was positive. Arm shares rose about 1 percent and have gained 25 percent this year - a signal that investors are starting to "get" that Arm is no longer just a design supplier, but a new heavyweight in the AI chip industry.

With the goal of launching new chips every 12 to 18 months, Arm seems to not just follow the AI trend - they are all-in again.