By Stephen Nellis and Max A. Cherney
(Reuters) – Arm has begun recruiting from its own customers and competing against them for deals as it pushes toward selling its own chips, according to people familiar with the matter and a document viewed by Reuters.
Arm supplies the crucial intellectual property that firms such as Apple and Nvidia license to create their own central processing units (CPUs). It has also been seeking to expand its profits and revenues through a range of tactics, including considering whether to sell chips of its own.
Arm appears to be ramping up that effort.
The UK-based company has sought to recruit executives from licensees, two sources familiar with the matter told Reuters. And Arm is competing against Qualcomm, one of its largest customers, to sell data center CPUs to Meta Platforms, according to a person familiar with the matter.
Arm spokesperson Erica Pompen declined to comment.
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 competitor, by forcing companies who rely on Arm technology to consider whether they will end up competing against the firm for business.
Arm took a dispute with Qualcomm over its licensing rates to court in December, though the UK-based company lost key elements of that trial. During questioning at the trial, Arm CEO Rene Haas said, “we don’t build chips” when asked about the company’s ambitions outlined in a board proposal to do so.
But Arm sought to hire executives from its customers as early as November, several weeks before that testimony, according to a document reviewed by Reuters.
A recruiter working for Arm sent a message to an executive at an Arm customer seeking to hire employees. The note, a copy of which was viewed by Reuters, said Arm wanted to hire an executive to help with 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 on other devices.
Arm recruiters have contacted other chip designers in Silicon Valley in an attempt to lure talent for the same purpose, according to two industry sources.
Arm is also competing with Qualcomm for business. Qualcomm was in discussions with Facebook owner Meta Platforms to supply it with a data center central processing unit based on Arm’s computing architecture, but Arm has won at least some of that business, according to a person familiar with the matter. The Financial Times earlier reported Arm’s deal with Meta.
Qualcomm spokesperson Yelena Tebcherani and Meta spokesperson Melanie Roe declined to comment.
Arm may also be seeking to compete with Nvidia, according to a research note published Thursday from J.P. Morgan’s Harlan Sur. Broadcom has won a contract for an effort by Arm and SoftBank Group to create a purpose-built artificial intelligence chip that will power data centers at the Japanese company, Sur wrote.
The deal may be worth as much as $30 billion in revenue for Broadcom, Sur wrote.
(Reporting by Stephen Nellis and Max Cherney in San Francisco; editing by Edward Tobin)
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