ARM Enters Chip Manufacturing, Challenging Its Own Clients

Arm Holdings, the British chip designer known for licensing its processor architecture to companies like Apple, Nvidia, and Qualcomm, is reportedly set to manufacture its own chips in 2025. This shift is a major pivot from its traditional business model and could turn Arm into a direct competitor to some of its biggest clients.

Investors welcomed the news, with Arm’s stock surging over 6% on Friday morning. The company has already secured Meta Platforms as one of its first customers, a significant milestone as it transitions from a pure intellectual property provider to a player in chip production. This move aims to capture a larger share of the booming AI and data center markets.

Arm has been recruiting executives from its client base to lead this transformation. The company is expected to unveil its first chip by summer 2025, entering the highly competitive market dominated by established semiconductor giants. 

Qualcomm, a long-time Arm customer, is already competing with the firm to supply data center CPUs to Meta, highlighting the potential tensions ahead. In 2022, Arm sued Qualcomm over licensing disputes related to its acquisition of Nuvia, but the case was ultimately dismissed.

What Does This Mean for Me?

Arm is not stopping at chipmaking. As a key partner in the Stargate Project—alongside Nvidia, Microsoft, OpenAI, and Oracle—the company is helping to build the U.S.’s AI infrastructure. However, competition is hotting up. Chinese AI startup DeepSeek recently launched a cost-efficient model, raising concerns about the future of Nvidia and, by extension, Arm’s own client relationships. With these industry shifts, Arm’s next moves will be closely watched.