In a strategic move, Arm Holdings (NASDAQ:ARM) has recruited Rami Sinno, a former Amazon.com Inc (NASDAQ:AMZN) artificial intelligence (AI) chip director, to enhance its in-house chip development plans.
Amazon AI Chip Veteran Joins Arm For New Chip Venture
Sinno, who played a key role in the development of Amazon’s AI chips, will now bring his expertise to Arm Holdings, Reuters reported. His appointment is a significant step for Arm Holdings as it aims to create its own complete chips, a new venture for the company.
Check out the current price of ARM stock here.
Arm Holdings, best known for designing processor architectures and instruction sets, recently announced plans to reinvest part of its profits into developing its own chips and components. The initiative marks a strategic shift aimed at expanding the company's role beyond providing chip intellectual property.
As the majority-owned company of SoftBank Group (OTC:SFTBY), Arm Holdings collects royalties on the chips sold by its customers. The company’s chips power nearly every smartphone globally and have made significant inroads in the data center market, challenging the dominance of Advanced Micro Devices Inc (NASDAQ:AMD) and Intel Corporation (NASDAQ:INTC).
Arm Explores Chiplets, Moves Beyond Licensing Model
Arm Holdings’ decision to hire Sinno and its plans to develop its own chips come at a time when the company is facing margin concerns. Despite a 12% year-over-year increase in revenue, the chip designer’s latest quarterly results fell short of analyst estimates, leading to a revision in ratings by Wall Street analysts.
However, Arm Holdings is actively exploring a strategic shift towards developing “full-end solutions” and chiplets, potentially moving beyond its traditional intellectual property (IP) licensing model. This move could potentially increase competition for Nvidia (NASDAQ:NVDA).
The hiring of Sinno is a part of Arm’s broader strategy to transition from providing essential chip intellectual property to developing its own full-fledged designs. This follows the company’s recent recruitment of executives from competitors, including Nicolas Dube from HPE (NYSE:HPE) and Steve Halter from Intel and Qualcomm (NASDAQ:QCOM).
Benzinga's Edge Rankings place Arm in the 36th percentile for momentum and the 6th percentile for value, reflecting its weak performance. Check the detailed report here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
