Arm has designed a processor that it will manufacture in-house, and it will be released this summer

Arm plans to launch its own chip this year, with Meta✴ Platforms as an early customer. The move would change Arm’s business model, which has previously made money by licensing its technology to other manufacturers, Reuters reported, citing the Financial Times. Arm’s U.S.-listed shares rose about 5% on the news.

Image Source: Arm

Until now, the company has made money from the artificial intelligence (AI) industry by charging higher licensing fees and royalties on sales of other manufacturers’ chips. But building its own chip puts Arm in direct competition with its biggest customers, such as Nvidia, which designs its chips based on Arm’s technology.

Arm CEO Rene Haas is expected to unveil the first chip this summer. The device will act as a central processing unit (CPU) for servers in data centers and can be customized to meet the needs of customers, including Meta✴. Manufacturing of the chip will be outsourced, possibly to TSMC.

Arm’s majority owner, Japanese holding company SoftBank, did not respond to requests for comment. However, its founder Masayoshi Son sees the launch of his own chip as part of his strategy to develop AI infrastructure.

SoftBank is also close to completing a $6.5 billion deal to buy Oracle-backed chipmaker Ampere, a deal that has been called a key part of Arm’s plan to enter the chip-making market.