Arm and the CPU renaissance

Arm said the company sees $2 billion in customer demand for its AGI-CPU through 2027, double what it saw just a few weeks ago. Arm is becoming one of the headliners for what's a full-fledged CPU renaissance due to AI inference.

The company reported better than expected first quarter adjusted earnings of 60 cents a share with revenue of $1.49 billion, up 20% from a year ago. Arm's revenue stream today is tied to license and royalty revenue, but Wall Street is playing for the future.

Arm's first quarter outlook projected revenue of $1.29 billion with adjusted earnings between 36 cents a share and 44 cents a share. Analysts were expecting first quarter earnings of 37 cents a share on revenue of $1.25 billion.

In March, Arm announced plans for its own AI chip for inference. Arm said it landed OpenAI and Meta as customers for its AGI CPU. The AGI CPU is built on Arm's Neoverse architecture , which is already used in AWS Graviton, Google Axion, Microsoft Cobalt and Nvidia Vera. Arm's AGI CPU already has a bevy of launch partners.

CEO Rene Haas touted Arm’s data center footprint and made it clear that the company can benefit from its own CPUs as well as all the custom silicon produced based on the Arm architecture.

"As AI is moving from human-based queries to continuous agent-driven workloads, this shift is expanding the role of the CPU. These Agentic workloads require CPUs to coordinate tasks, move data, manage memory, enforce security and orchestrate workaround accelerators. As Agentic AI scales, data centers will require more than 4x today's CPU capacity, creating a data center CPU market opportunity of more than $100 billion by 2030," said Haas on Arm's earnings call.

Meta is the lead partner on the Arm AGI CPU.

Haas reiterated that Arm could deliver $15 billion on its own CPU in fiscal 2031. Arm noted that SAP is moving its core database and business application workloads to AWS Graviton and then expanding to Arm AGI CPU. Cloudflare is deploying Arm. Cerebras, OpenAI, Rebellions and Positron will also leverage the Arm AGI CPU.

The takeaway here is that Arm can benefit from licensing its architecture and designing its own chips. Haas expects Arm to continue to take data center share from AMD and Intel.

Haas said:

"We see a very, very strong direction with all of the Arm hyperscalers who use our technology today, whether it's Nvidia, whether it's Amazon, whether it's Google, the very largest and most prevalent accelerators by volume is the TPU, it's Trainium and it's Rubin today, Blackwell going to Rubin. Those all connect to Arm. And increasingly, they are going to be 100% Arm."

The biggest risks with Arm's big CPU plan are channel conflicts with partners as well as execution.

Haas tried to alleviate those concerns. "AWS or Microsoft or Google or Nvidia all have products. So, we went to them early on this, and we explained to them what we were doing. We explained to them why we were doing it, and we explained to them why it was beneficial to the Arm ecosystem that we do it, and that's largely because the more software that's written and optimized for Arm makes everyone stronger," said Haas. "We asked for their support of the strategy at the Arm Everywhere Day. And every single partner we asked said yes."

As for the execution risk, Arm now has to deliver its own silicon.

More on CPUs

• AMD continues to ride EPYC, GPU data center waves
• Intel Q1 better than expected, aims for CPU renaissance
• Nvidia GTC 2026: Nvidia’s hardware strategy goes beyond GPU in AI inference pivot
• Nvidia GTC 2026: AI inference fueling demand boom, $1 trillion of order flow
• Qualcomm sparks AI inference interest