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ARM plans to launch its first AI chip next year. A new division within the company should have a prototype ready by early 2025.

TSMC and others should already be producing the chips later in 2025. After starting mass production, the ARM division would fall under the wing of Japan’s SoftBank. That company owned ARM until its IPO in September 2023. The total cost of R&D and production will be hundreds of millions of euros.

Raging upbeat

If ARM succeeds in delivering the chip by the end of 2025, it would be a lightning-fast turnaround time. Normally, creating a new semiconductor takes between 18 and 36 months. This suggests that the chip designer may already have advanced plans for its intended chip but has yet to spin it into a separate division. These are all speculative timetables as things stand, but a delay would not be surprising given the time frame.

ARM isn’t the only company with AI chip plans. Microsoft has teamed up with Intel, presumably to make AI accelerators for data centres. Google also recently introduced an ARM CPU named Axion.

Also read: Google introduces its first proprietary ARM CPU, called Axion

No more Switzerland?

ARM’s choice to make an AI chip raises several questions. The chip designer’s business model revolves around reselling its designs to third parties such as Apple, Nvidia, Microsoft and Qualcomm. In doing so, it employs a “Switzerland” model. In other words: it does not compete with these parties despite the fact that it could. It is the same strategy of TSMC deploys (but catered to chip manufacturing), with all major semiconductor companies willing to send it their intended chip designs.

ARM has been threatening to depart from this model for some time. The company’s neutrality was already strongly questioned when it looked like Nvidia would acquire it. Regulators swept that potential deal off the table, ultimately leading to SoftBank’s IPO.

The latter, meanwhile, has big ambitions in partnership with ARM. SoftBank CEO Masayoshi Son would like to use the new AI chip to create data centres worldwide by 2026. He also envisions SoftBank playing a key role in electricity generation and solar farms. So, there is no shortage of ambition at the Japanese company, along with ARM.