Arm’s $15B Chip Bet, Sanders & AOC vs Datacenters, Meta & YouTube Lose Trial | Diet TBPN

This week's episode covers ARM's strategic pivot into chip manufacturing amid rising CPU demand, a proposed bill by Senators Sanders and AOC to pause data center builds, and a California jury's verdict holding Meta and YouTube liable for addictive app features.

ARM's Shift from IP Licensing to Chip Sales

ARM, long focused on licensing CPU intellectual property designs with 97% gross margins and $4 billion in last year's revenue, announced it will produce its own chips, partnering with Meta and OpenAI on "purpose-built CPUs" like the ARM AGI CPU for AI infrastructure. The stock rose 15% this week, pushing market cap to $166 billion at a 90x forward earnings multiple, with projections for $15 billion revenue by 2031 despite expected margin drops to around 50%.

ARM's history traces to the 1990s need for low-power CPUs in PDAs like PalmPilots—pre-smartphone devices for notes and tasks—born from a joint venture of Apple, Acorn Computers, and VLSI. It standardized RISC architecture amid CISC vs. RISC debates, enabling licensees like Apple (M-series chips), Amazon (Graviton), and Android makers. SoftBank owns ~90% of ARM, worth ~$140 billion.