Arm's shares jumped 13.2% in premarket trading following the company's announcement of its first-ever in-house chip, the AGI CPU, which is designed for AI inference in data centers [1]. CEO Rene Haas stated that Arm expects the new chip to generate $15 billion in annual revenue by 2031, a figure that is six times greater than the $4 billion in annual revenue reported in 2025 [1]. The company also projects total annual revenue of $25 billion and earnings per share of $9 by 2031 [1].
The AGI CPU chip was unveiled at an event in San Francisco, with Meta, OpenAI, Cloudflare, and SAP named as Arm's first customers [1]. Meta is highlighted as the first official customer, committing to significant data center build-outs and planning $135 billion in capital expenditure related to AI this year [1]. The chip targets the rapidly growing demand for central processing units driven by the rise of agentic AI [1].
Arm's move marks a significant shift in its business model, as the company traditionally licensed its instruction sets to other firms and collected royalties. With the launch of its own chip, Arm is now competing directly with customers such as Amazon, Microsoft, Nvidia, and Google [1]. Citi analysts described the announcement as the "most significant shift in the company's history," noting that the revenue forecast is well above even the highest speculated estimates and should ease concerns about changes in the company's margin structure [1]. They emphasized that the incremental profit and cash flow from the new chip would drive shareholder value [1].
Arm's cloud AI head, Mohamed Awad, commented that the chip addresses a $1 trillion market and that partners are recognizing the positive industry impact of Arm's new direction [1]. The stock closed down 1.5% on Tuesday but rebounded strongly in premarket trading after the announcement [1].
CONCLUSION
Arm's unveiling of its AGI CPU chip and bullish revenue projections have triggered a strong positive market reaction, with shares rising sharply in premarket trading. The company's strategic shift to manufacturing its own chips, backed by major customers and analyst support, signals a transformative moment for Arm and positions it to capture significant value in the expanding AI data center market.