Over the past week, UK chip designer Arm Holdings has experienced a massive surge in its stock market value, nearly doubling in worth. The driving force behind this growth is the increasing demand for artificial intelligence (AI) technology, which is reflected in the company’s latest financial results showing a significant boost in sales related to AI. This success has led to a dramatic increase in Arm’s valuation, which was acquired by Japan’s SoftBank in 2016 and returned to the public market last September.
Arm chips power almost every smartphone in the world and are also used in the automotive industry due to the development of self-driving technology. Although Arm’s technology is not directly related to AI, chip manufacturers like Nvidia are choosing Arm for CPUs that complement their AI-specific chips. In addition to Nvidia and Taiwan Semiconductor Manufacturing Company, Arm also counts well-known consumer brands like Apple among its customers.
The rise of Arm’s stock market value comes at a time when chipmaker Nvidia has also seen tremendous growth, with its shares more than tripling in value over the past year. This high demand for AI chips has made Nvidia one of the most valuable publicly-traded companies in the world, worth around $1.8 trillion. With this increase in value, Arm and its Japanese owner, SoftBank, now have new opportunities to expand their business and take advantage of the growing market for AI technology.