Arm has announced its first in-house CPU, a big change for the British chip design company after more than 35 years of sticking to licensing its technology to others. The new processor, called the AGI CPU, is built for artificial intelligence and data-centre workloads, as the demand for computing power continues to surge with the rapid growth of AI services.
Arm’s move into chipmaking comes at a time when the AI boom is at its peak, with companies around the world racing to build the infrastructure needed to support growing demand. Arm has traditionally earned revenue by providing processor architecture to firms such as Apple, Qualcomm and Nvidia, collecting royalties on every chip built using its designs. However, now by developing CPUs, the company is entering the chipmaking business directly, putting it in closer competition with some of its long-time customers.
Arm says its new AGI CPU has been built for next-generation data centres running advanced AI systems, including so-called agentic AI, which requires large amounts of general computing power along with specialised AI accelerators. The company added that the chip has been designed with a strong focus on performance per watt, something that has become critical for companies running massive server facilities where power consumption is one of the biggest limitations.
To build the new processor, Arm has expanded its chip development operations and set up advanced testing labs where engineers run multiple rounds of validation before the chips go into production. Like most modern chip designers, the company is using Taiwan Semiconductor Manufacturing Company’s advanced 3-nanometre process to manufacture the CPU. Arm says the goal was to create a highly efficient server chip that can fit into dense data-centre racks while delivering more performance without increasing power consumption.
Meta has signed on as the first customer for the new processor and has worked with Arm on the project. The social media company is rapidly expanding its AI infrastructure and plans to spend tens of billions of dollars on data centres and hardware this year. According to Meta, Arm’s CPU gives the company more flexibility in its software stack and supply chain at a time when demand for chips is extremely high.
“In today’s world, you really only have a couple of players. This adds yet another player to the ecosystem for us,” said Meta software engineer Paul Saab in an interview with CNBC. Saab, who has worked on the Arm chip project since 2023, added that the deal allows “a lot more flexibility in our software stack and in our supply chain.”
Arm said the processor is being manufactured using advanced 3-nanometre technology and is expected to go into large-scale production later this year. The company also indicated that this will not be a one-off project, with more chip designs planned as it pushes deeper into the data-centre market.
