• Amazon, Google, and Apple are building new AI and server processors using Arm architecture from Arm Holdings (NasdaqGS:ARM).
• Apple has agreed a new long term deal with Arm that extends beyond 2040.
• These developments highlight Arm's role in AI and data center chip design for large technology companies.

Arm Holdings sits at the center of chip design for mobile devices, data centers, and AI focused processors, licensing its architecture to companies that build their own chips. As Amazon, Google, and Apple rely on Arm based designs for their latest AI and server chips, Arm technology forms part of the underlying infrastructure that powers cloud services and advanced computing workloads.

For you as an investor, the extended agreement with Apple points to a long running relationship between a major customer and Arm architecture. Ongoing use of Arm in AI and data center processors by several large technology firms keeps the company closely tied to trends in cloud computing, smartphone chips, and custom silicon for AI heavy applications.

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For Arm, deeper collaboration with Amazon, Google, and Apple reinforces its role as a central building block for AI data centers and custom server chips, while keeping its licensing business at the core rather than pushing it into capital intensive manufacturing. The long-term agreement with Apple that runs beyond 2040 also helps underpin visibility on licensing and royalty streams tied to iPhone, Mac, and other Apple devices that use Arm based designs.

Arm Holdings Narrative, AI licensing and long-cycle demand

The existing Arm Holdings narrative already highlights custom silicon, rising royalty rates, and expansion across cloud AI, edge, and what the company calls Physical AI as key long-run themes, and this news fits squarely into that picture. When hyperscalers like Amazon Web Services and Google, plus Apple on the consumer side, keep standardizing new AI focused processors on Arm, it supports the idea that Arm’s architecture is deeply embedded across data center and device roadmaps, even as competitors such as Intel, AMD, and NVIDIA pursue their own CPU and accelerator offerings.

Risks and rewards to keep in mind

• Deeper adoption of Arm based chips at hyperscalers can support recurring licensing and royalty income from AI and server workloads.
• A broadening role in cloud and AI computing gives Arm more touchpoints across the semiconductor value chain than many CPU focused rivals.
• Concentration in a few very large customers like Apple, Amazon, and Google could be a vulnerability if any of them shift architectures or internalize more design work.
• Competition from x86 and other architectures, plus in house designs at big tech firms, may influence Arm’s pricing power and share of future AI silicon projects.

What to watch next

Looking ahead, it is worth watching how Arm speaks about AI related design wins, royalty trends in cloud and data center, and any moves by peers such as Intel, AMD, or NVIDIA to counter Arm based server adoption. If you want a broader context for how these partnerships fit into Arm’s long term story and different investor viewpoints, check community narratives on Arm’s dedicated page.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.