Arm Expects Up to $2 Billion From Its Own Server Chip. Meta Is the Lead Customer.

Arm raised its confidence in its AGI CPU revenue outlook over the past 90 days, CEO Rene Haas told analysts, with the first shipments due in the quarter ending March 31, 2027.

A data center planner gets a new supplier of server processors, with a price that memory costs pull on. Haas called memory probably the largest single cost of the chip and said memory prices have climbed since Arm announced it. Arm expects a first-version gross margin of roughly 30% to 40%, and it says it has room to raise its own prices.

Who has ordered it?

Arm has purchase orders from multiple customers that extend through calendar 2027, with Meta as the lead customer. Demand has run beyond what Arm expected, Haas said, and “there will be multiple customers beyond Meta.” Arm did not say how many customers have ordered, how many chips Meta bought or what the orders are worth.

Oracle Cloud Infrastructure plans to offer AGI CPU instances in 2027, which puts the chip in a major cloud as well as in racks that Supermicro, Lenovo and ASRock build.

When does the revenue arrive?

At its Arm Everywhere event in March, Arm saw a path to $1 billion from the chip. Haas now puts it at up to $2 billion across fiscal 2027 and 2028, which ends March 31, 2028. CFO Jason Child said the quarter before the first shipments would bring little revenue, if any.

By The Denominator’s arithmetic, $2 billion spread over the five quarters from January 2027 through March 2028 averages $400 million a quarter, though Arm gave no quarterly split. Delivery dates also depend on supply. Arm has spent several quarters lining up wafers, substrates, testers and memory, Haas said, and he expects supply across the industry to stay tight.

What does the margin depend on?

Child told analysts to expect 30% to 40% on the first version and 50% or more, the market standard, on a later one. Memory is the pressure on that figure, and price is Arm’s answer: Haas said Arm has already shown it can raise prices as the program started and is not worried about margins. How much of a memory increase reaches buyers is not yet known.

Arm also cites testing by Signal65 that found the chip delivers about twice the performance per rack of AMD’s EPYC 9755. Haas said the test used the generation before AMD’s current Venice chip, and that Arm is confident in a head-to-head comparison with Venice.

Arm will update the chip’s margin each quarter once shipments begin in the quarter ending March 31, 2027, and its next Arm Everywhere event, expected in the first half of 2027, is due to bring updated longer-term targets.