Arm Holdings is rolling out its own chip for the first time in its 35-year history. It has secured Meta as its first customer.

Arm Chief Executive Rene Haas unveiled the company’s first self-designed data centre CPU, called the AGI CPU, at an event in San Francisco on March 24.

Arm has supplied design assets under licence to major chipmakers such as Intel and AMD and collected royalties. With this chip launch, Arm will also compete directly with customers.

Meta, which plans to spend up to $135 billion in capital expenditure this year, is building AI data centres on the scale of several gigawatts. Against that backdrop, Meta plans to use Arm CPUs as alternatives to existing computing CPUs. Meta software engineer Paul Svob said, "There are only a handful of major suppliers in the market right now," adding, "Arm has added one more option to the ecosystem."

He also added that the deal would increase flexibility in the software stack and supply chain. Chip analyst Patrick Moorhead said, "Even if Arm captures just 5 percent of Meta’s capital expenditure, it will be a game changer for revenue."

The company said the AGI CPU was designed to be optimised for artificial general intelligence. It supports installing up to 64 CPUs and about 8,700 cores in a single air-cooled rack. Arm said performance per watt is twice that of an x86 rack. It said that meant twice the performance with the same space and power. The company said it expects the terms to be attractive for data centre operators facing tight power constraints.

Arm will produce the AGI CPU using Taiwan’s TSMC 3-nanometre process. It plans to start mass production within this year.

Before the launch, about 50 partners, including Google, Amazon, Microsoft, Oracle, Broadcom, Micron, Samsung Electronics, SK Hynix and Marvell, expressed support for Arm’s move. Nvidia Chief Executive Jensen Huang also sent congratulations in a video message.

Mohamed Awad, head of cloud AI at Arm, said, "The CPU market is worth $1 trillion." He said, "Partners recognise that this move benefits the entire industry," adding, "We will set competitive pricing and target companies that do not have the capacity to develop their own chips."