Arm's chip architecture IP is foundational infrastructure for all computing including AI - it collects royalties on processors regardless of what tasks they perform, making it a structural beneficiary of AGI-driven compute proliferation.
Arm designs and licenses CPU architecture and processor intellectual property (IP) that powers virtually all smartphones and an increasing share of servers, automotive systems, and IoT devices. Unlike traditional chip companies, Arm does not manufacture chips. Instead, it licenses its instruction set architecture (ISA) and CPU/GPU core designs to semiconductor companies and OEMs who then build their own chips. Arm collects both upfront license fees and per-unit royalties on every chip shipped using its technology.
Arm's customers are the world's leading chip designers and manufacturers including Qualcomm, Apple, Samsung, MediaTek, NVIDIA, Broadcom, Google, Amazon (for Graviton), Microsoft, and hundreds of other semiconductor companies. These licensees design chips for smartphones, servers, automotive, IoT, and embedded systems. Over 280 billion Arm-based chips have been shipped to date.
Arm licenses chip architecture (instruction set architecture and CPU/GPU core designs) to virtually every major chip company in the world. AGI cannot replace the need for chip architectures -- every processor needs an instruction set, and Arm's architecture powers 99%+ of smartphones, most IoT devices, and a growing share of data center, automotive, and PC chips. AGI could theoretically help design competing architectures (like RISC-V), but Arm's ecosystem (software compatibility, developer tools, decades of optimization) creates enormous switching costs. Arm's customers are chip designers who build processors for every market, and many AI accelerators (NVIDIA Grace, Amazon Graviton, Google Axion) use Arm CPU cores.