Arm after the IPO

Arm EVP and Chief Commercial Officer Will Abbey told me this morning, minutes before the chip designer’s stock started trading on Nasdaq, that “AI, I believe, is the growth of Arm.” You may not think of AI when you hear about Arm, but Abbey immediately thought of it when I asked what’s next for the company. First, AI runs on Arm today and is everywhere when I think about what’s next. As AI becomes more pervasive, I think demands for more compute, power efficiency, and a relevant software ecosystem will drive us to continue to deliver in those areas.

His example was Nvidia’s Grace Hopper superchip. It uses Arm’s Neoverse core 72 and Nvidia’s H100 Tensor Core GPU. Of course, this synergy led Nvidia to try to acquire Arm, but regulatory concerns derailed the deal. “Whether it’s training today that leads to inferencing downstream, the ARM architecture is ideal to enable AI at scale,” Abbey said.

According to Arm’s data, over 250 billion Arm-based chips have been shipped, so the company has a huge hardware install base. Abbey stressed the importance of a software ecosystem around these chips as a differentiator between Arm and its competitors.

This is something the company has heavily invested in recently. In its latest factsheet, Arm states that it spent 10 million engineering hours on Armv8 chip software and tools and 30 million on Armv9 chip software tooling.

“It’s not just about a hardware solution in the markets we’re targeting,” he said. It ensures developers can easily access your architecture. The developer community matters. Developers want their apps to work on as many devices as possible. We have a huge moat between us and others because we can develop best-in-class products and make ourselves accessible to developers.

Abbey said that Arm never had a hiring problem, but that the IPO would “elevate ARM to its rightful position as a tech employer” by creating “a bigger shopping window for engineers to want to join Arm.”

We have 15 million software developers in the ecosystem and will continue to invest in software. I think AI will create future opportunities for us and require Arm to build the right products and staff.”

Abbey agreed that the IPO will allow Arm to attract more talent, but he also said, “It’s just a moment in time — and it’s an important moment.” Our market reach is acknowledged. We will invest in power efficiency, ultimate performance, and ecosystem. The IPO does not affect our investment trajectory.”