The explosive growth of the AI industry is driving demand beyond expectations, leading the CEO of ARM Holdings (ASX: ARM) to suggest that the company's in-house chip business might reach its $15 billion sales target ahead of schedule.
This optimistic outlook is fueled by two major announcements from NVIDIA (ASX: NVDA) CEO Jensen Huang at the Computex event, which ignited a rally for ARM's stock on Wall Street. In the cloud data center sector, Huang announced the full-scale production of the next-generation 'Vera Rubin' AI platform, which integrates the new Rubin GPU with NVIDIA's own Arm-based 'Vera' CPU. Huang specifically named OpenAI, Anthropic, SpaceX, and Oracle as the first major adopters of this powerful Arm-based chip.
On the consumer front, NVIDIA, in a historic move, partnered with Microsoft and MediaTek to launch the first Arm-based consumer Windows PC 'super chip', called RTX Spark. This initiative aims to 'reinvent the PC' with Arm architecture, directly challenging the traditional x86 PC market long dominated by Intel and AMD.
NVIDIA's comprehensive endorsement of Arm in both cloud and edge computing has significantly expanded Arm's potential in the high-end AI computing and trillion-dollar edge AI agent markets. Following this industry shift, ARM CEO Rene Haas stated in an interview that he is now "extremely confident" about hitting the revenue target by the end of the decade, but noted that the current revolutionary pace could see the milestone achieved even earlier.
As evidence, Haas announced during his Computex keynote that tech giants like ByteDance and Oracle have formally adopted ARM's new in-house AI data center CPU. Haas remarked, "I hope we can get there sooner. The demand is significantly higher than we had forecast. The order pipeline looks fantastic."
ARM's strategic pivot was marked in March by its official entry into designing and selling its own chips, moving beyond its traditional, highly successful IP licensing model. As part of this shift, the SoftBank-controlled company set aggressive financial targets, expecting the new chip business to eventually surpass its core IP licensing revenue.
Meta Platforms Inc (ASX: META) is set to be the first major customer for ARM's new in-house chip, named the AGI CPU. According to the UK-based company, this processor will feature up to 136 cores, have a power consumption of 300 watts, and will be manufactured by Taiwan Semiconductor Manufacturing Company (ASX: TSM).
Haas reiterated that the decision to develop this component was driven by direct customer demand. The CPU is designed to work alongside AI accelerators from companies like NVIDIA, handling critical tasks such as workload orchestration between servers, data preprocessing, and powering the interactive responses for user AI queries.