Arm and Alibaba Launch AI-Optimized Chips

Arm Holdings unveiled its own data center chip optimized for AI inference.

Arm Holdings unveiled its own data center chip optimized for AI inference.

The first customer for the new chips is Meta. According to Arm CEO Rene Haas, this development is expected to generate approximately $15 billion in annual revenue by 2031. The company’s total revenue could reach $25 billion, with earnings per share at $9.

CPU are experiencing renewed demand amid the rise of agent-based AI, which is altering computational requirements. Arm’s CEO predicts that demand for such chips will quadruple.

“In modern data centers, the CPU manages thousands of tasks: coordinating accelerators, managing memory and storage, distributing loads, and moving data. With the advent of agent-based artificial intelligence, it also coordinates the work of numerous assistants,” the company stated.

The release of the Arm AGI CPU marks a significant shift in the company’s business model. Previously, it had no manufacturing capabilities of its own and for 35 years earned solely from licensing and royalties.

“The Arm AGI CPU delivers high performance per task while operating thousands of cores in parallel, all within power and cooling constraints,” the company’s blog emphasized.

Arm is renowned for its architecture, which underpins most modern smartphones. In 2018, it began competing with Intel and AMD’s x86 server chips by launching the Neoverse platform.

“For the first time in over 35 years, Arm is releasing its own chips—expanding Neoverse beyond IP and Arm Compute Subsystems to offer customers more choices in deploying computing: from creating their own chips to integrating platform solutions or using processors developed by the company itself,” the announcement stated.

Alibaba’s Counterpart

The Chinese tech giant Alibaba introduced its own solution—a CPU for agent capabilities, the XuanTie C950.

The chip can handle multi-step tasks performed by AI assistants. It will be used in data centers for inference.

Until recently, the industry focused primarily on graphics processing units (GPUs), a market dominated by Nvidia. Such chips are essential for training large models as they can perform numerous computations in parallel.

Conversely, CPU architecture involves sequential operation execution, making them an optimal choice for the emerging ecosystem of AI agents focused on executing specific action sequences.

The XuanTie C950 “can be customized for specific inference scenarios, allowing clients to tailor processors to their tasks.” The processor is based on the open RISC-V standard, an alternative to Arm’s architecture.

Back in December 2025, Amazon Web Services introduced a new version of its proprietary AI chip—Trainium3.