Arm Debuts New Artificial Intelligence (AI) CPU, Nabs Meta, OpenAI, Cloudflare as First Customers
Key Points
After decades of creating blueprints for semiconductors, Arm is creating its own physical silicon for the first time.
The chipmaker partnered with Meta Platforms to create the Arm AGI CPU.
Arm has lined up an impressive roster of initial customers for its inaugural chip.
- 10 stocks we like better than Arm Holdings ›
For more than 35 years, Arm Holdings (NASDAQ: ARM) has been at the forefront of chip design, creating and licensing the blueprints for a wide range of semiconductors for smartphones, personal computers, tablets, and smart TVs, as well as hyperscale computing, cloud computing, and data centers. Moreover, the company's chip designs are used in thermostats, automobiles, and even drones. In fact, Arm say it controls a "significant proportion of all chips with embedded processors."
Now that the proliferation of artificial intelligence (AI) is taking hold, the company is making what is arguably the biggest pivot in its storied history. Arm is making physical silicon for the first time, a move long rumored in the industry. At an event in San Francisco this week, Arm unveiled its first in-house chip, dubbed the Arm AGI CPU.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
The era of agentic AI
The company says the Arm AGI CPU is "the first production silicon from Arm, designed for AI infrastructure at scale." The chip is "ruthlessly optimized" for artificial general intelligence (AGI), hence the name, according to Mohamed Awad, Arm's cloud AI chief.
The processor boasts up to 64 CPUs and about 8,700 cores, which can get "two times the performance-per-watt than you can from an x86 rack," Awad said. "That means twice as much performance in the same footprint, in the same power." He went on to say the benefit of Arm's architecture is that it's "super-efficient" at a time when companies are looking to get the most bang for their AI buck.
Arm unveiled a Who's Who of technology companies as customers for its inaugural semiconductor. Meta Platforms (NASDAQ: META) served as the lead partner and co-developer of the Arm AGI CPU and will be its first wide-scale user, noting that it was created to work hand in hand with Meta's homegrown chips -- the Meta Training and Inference Accelerator (MTIA). The companies pledged to collaborate across multiple generations of the Arm AGI CPU roadmap.
Other early customers include content delivery network (CDN) provider Cloudflare, multi-cloud security specialist F5, ChatGPT parent OpenAI, enterprise software specialist SAP, and SK Telecom, South Korea's largest telecommunications operator, among others.
Arm is already one of the premier names in semiconductors, counting Apple, Nvidia, Amazon, Alphabet's Google, and Microsoft among its biggest customers. More than 350 billion Arm-based chips have shipped to date, with more than 22 million software developers in the Arm ecosystem. By branching into a new business, Arm hopes to capture a share of the $1 trillion AI CPU market.
And Arm sports a forward price/earnings-to-growth (PEG) ratio of 0.57, when any number less than 1 is the standard for an undervalued stock.
Should you buy stock in Arm Holdings right now?
Before you buy stock in Arm Holdings, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arm Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $503,592!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,076,767!*
Now, it’s worth noting Stock Advisor’s total average return is 913% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of March 24, 2026.
Danny Vena, CPA has positions in Alphabet, Amazon, Apple, Cloudflare, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Cloudflare, Meta Platforms, Microsoft, and Nvidia and is short shares of Apple. The Motley Fool recommends SAP. The Motley Fool has a disclosure policy.
Recommended Articles
