Shares of Arm (ARM) rocketed more than 15% higher in early trading on Wednesday after the company unveiled its first production data center processor: the Arm AGI CPU (central processing unit).
Arm has traditionally licensed its intellectual property to other companies to develop their own chips, including Apple (AAPL) and Nvidia (NVDA), which uses Arm’s capabilities in its Grace and Vera CPUs.
Arm said it co-developed the AGI CPU with Meta (META), which is deploying them alongside its own custom chips inside its data centers.
Beyond Meta, Arm said it’s also working with Cerebras, Cloudflare (NET), F5 (FFIV), OpenAI (OPAI.PVT), Positron (POSC), Rebellions, SAP (SAP), and SK Telecom (SKM), which will use the chip for agentic AI applications, among others.
Despite Wall Street’s exuberance for Arm’s new chip, BofA Global Research analyst Vivek Arya pointed out in a note to investors that the company is far from the only CPU game in town.
“We highlight the CPU market is getting very crowded. Incumbents in both x86 and ARM have much wider breadths of portfolio and established software/ecosystem, catering to enterprise/telco customers,” he wrote.