Arm Unveils $15 Billion Chip, Boosting Stock

British semiconductor firm's new AI chip set to generate massive revenue by 2031.

Mar. 25, 2026 at 10:34am by Ben Kaplan

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Arm, the British semiconductor and software design company, saw its stock jump 13% in premarket trading after announcing its first-ever in-house chip, the AGI CPU, which is designed for AI inference in data centers. Arm said the new chip is expected to generate $15 billion in revenue by 2031, with total annual revenue of $25 billion and earnings per share of $9.

Why it matters

Arm's move to manufacture its own chip, rather than just licensing its designs to other companies, represents a significant shift in the company's business model. This puts Arm in direct competition with some of its major customers, including tech giants like Amazon, Microsoft, Nvidia, and Google. However, the bullish revenue forecasts have eased concerns about potential margin pressures from this change.

The details

The AGI CPU chip is designed specifically for AI inference in data centers, as demand for central processing units has surged with the rise of agentic AI. Arm's CEO Rene Haas said the new chip is expected to generate $15 billion in revenue by 2031, which is six times more than the $4 billion the company generated in annual revenue in 2025. Arm is selling the new chip at about a 50% gross profit margin and positioning it as a competitively priced option for companies that can't afford to build their own in-house chips.

  • Arm unveiled its new AGI CPU chip at an event in San Francisco on Tuesday, March 24, 2026.
  • Arm expects the new chip to generate $15 billion in revenue by 2031.

The players

Arm

A British semiconductor and software design firm that has traditionally licensed its instruction sets to other companies and collected royalties on every processor made with its designs. With its new AGI CPU chip, Arm is now competing with its own customers.

Rene Haas

The CEO of Arm.

Meta

The first official customer for Arm's new AGI CPU chip, as the company commits to huge data center build-outs and plans $135 billion in capital expenditure related to AI this year.

OpenAI

One of the first customers for Arm's new AGI CPU chip.

Cloudflare

One of the first customers for Arm's new AGI CPU chip.

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The takeaway

Arm's move to manufacture its own chip, rather than just licensing its designs, represents a significant shift in the company's business model. However, the bullish revenue forecasts for the new AGI CPU chip have eased concerns about potential margin pressures, and the chip has already attracted major customers like Meta and OpenAI, signaling strong demand in the growing AI inference market.