Prime Highlights :
- Arm Holdings announced its first in-house AI chip, marking a major shift from its traditional licensing business model.
- The company projects annual revenue to reach $25 billion by 2031, driven largely by its new chip business.
Key Facts :
- CEO Rene Haas revealed the update at an event in San Francisco, triggering a 6% rise in after-hours trading.
- Meta Platforms will be the first to adopt the new AI-focused chip designed for inference workloads.
Background :
Shares of Arm Holdings rose about 6% in after-hours trading after the company announced strong future revenue targets and launched its first in-house chip. The announcement was made by CEO Rene Haas at an event in San Francisco.
The company said it expects to generate around $25 billion in annual revenue by 2031, a sharp rise from just over $4 billion in 2025. Of this, the newly introduced chip could contribute nearly $15 billion each year. The chip is designed to handle artificial intelligence (AI) workloads, especially tasks related to AI inference.
Meta will use the new chip first. This move marks a big change for Arm, which usually licenses its chip designs to other companies instead of making its own processors.
The new chip targets growing demand for computing power driven by AI. Company executives said central processing units (CPUs) could see a major increase in demand as AI technology evolves. Arm believes this demand may grow even faster than current estimates.
The company also said the new chip business could offer strong profit margins. It plans to sell the chips at competitive prices to attract companies that cannot build their own processors.
Arm has long powered most smartphones with its chip designs. In recent years, it has expanded into data centers and AI computing, where it now competes with Intel and AMD.
The launch of its new chip marks a new phase. It aims to grow its role in the fast-growing AI market and create new ways to earn money beyond licensing.