ARM specialist Arm is going to compete directly with its own customers. The specialist in designs and licenses for the ARM architecture is launching its first proprietary processor: the Arm AGI CPU aimed at the (AI) data center.
Arm announces the Arm AGI CPU. This is not just a blueprint for a CPU or core, but a real physical processor. The CPU rolls off the 3 nm line at TSMC and includes 136 Neoverse v3 computing cores. Each core has 2 MB of L2 cache on board and can process one thread at 3.7 GHz.
The chip comes with a reference design for a 1U server featuring two Arm AGI CPUs on the motherboard. 30 air-cooled servers fit into a single 36 kW rack, totaling 8,160 computing cores. The computing power will initially be deployed for AI-related workloads. Meta is the launch customer for the new product.
Competitor to its own customers
More important than the chip itself, however, is the strategy behind it. With the launch of the AGI CPU, Arm is going into full direct competition with its most important customers. Plans for this circulated throughout last year and are now taking a very concrete shape.
Traditionally, Arm is not a chip manufacturer, but a designer. The company designs blueprints for processor cores, such as the Cortex cores for smartphone chips and Neoverse for data center processors. Chip designers like MediaTek and Nvidia buy the licenses for those ARM core designs and incorporate them into their own finished processors.
Arm also has customers that do not buy finished design licenses. Apple’s M-chips, for example, are ARM chips compatible with the ARM instruction set, but they do not integrate Cortex or Neoverse cores. For such customers, Arm provides a broader ARM architecture license. In other words, the company Arm is the owner and curator of the ARM architecture.
No longer neutral
Arm’s customers are traditionally competitors with each other: MediaTek and Qualcomm both make ARM smartphone processors, and Nvidia and AWS both build Neoverse-based data center chips. Arm itself was an independent party in this ecosystem.
Until now: the Arm AGI CPU is a commercial product, built on the proprietary Neoverse v3 designs that Arm also sells to customers. Arm is therefore entering into full competition with its traditional buyers. Furthermore, the Arm AGI CPU will not be an exception. Arm is working on other data center chips and is reportedly also developing processors for PCs and smartphones.
Several players, including Micron, Marvell, Google, TSMC, Samsung, and Nvidia, have publicly welcomed the launch of the new processor. Qualcomm, meanwhile, remains silent.
Arm’s decision to approach end customers directly certainly has consequences for the ecosystem. Today, demand is high enough to facilitate multiple players. However, the production capacity of TSMC and other parties is limited. Chips produced for Arm take up capacity from other ARM chips. Arm reasons that the extra profit from selling its own processors will, in any case, outweigh any friction within the customer ecosystem.