Arm Shifts Strategy, Competes Directly with Customers in Chip Market

Arm, the UK-based technology provider behind the intellectual property used in countless CPUs, is reportedly making a significant shift in its business model, according to Reuters. The company, which licenses its technology to major tech firms like Apple and Nvidia, is now actively recruiting from its own customer base and competing for deals directly against them as it expands its own chip-making ambitions.

Reuters, citing sources familiar with the matter and a document viewed by the publication, reports that Arm is actively recruiting executives from its licensees and competing against Qualcomm for a significant deal to supply data center CPUs to Meta Platforms.

"The tech provider's moves to build out its own chip business could upend an industry that has long viewed the company as a neutral player rather than a competitor," Reuters notes.

This strategic shift contrasts with statements made by Arm CEO Rene Haas during a December court case against Qualcomm regarding licensing rates. In the trial, Haas reportedly said, “we don't build chips” when questioned about the company's ambitions outlined in a board proposal to enter the chip market.

However, a document reviewed by Reuters reveals that Arm began recruiting executives from its customers as early as November, predating Haas's testimony. A recruiter working for Arm sent a message to an executive at an Arm customer seeking to hire employees, stating that Arm aimed to recruit for its "transformation from solely designing processor architecture (IP) to also selling its own silicon, with a focus on driving AI enablement in the data center" and other devices.

This shift in strategy could have significant implications for the tech industry. Companies that rely on Arm's technology will need to evaluate whether they will become future competitors as Arm expands its own chip-making capabilities. The report also highlights Arm's growing competition with Qualcomm, with evidence suggesting Arm secured at least part of a large deal with Meta Platforms for data center CPUs.