AMD vs Arm Holdings

AMD was founded on May 1, 1969 by Jerry Sanders and seven colleagues who had all left Fairchild Semiconductor — the company that had spawned Intel a year earlier. Sanders, a former actor and salesman, had been passed over for the top job at Fairchild. He started AMD with $100,000 in seed capital and a philosophy that "people first, products and profits will follow."

IBM's decision to use Intel's 8086 processor in the original PC came with a condition: Intel had to license the design to a second manufacturer for supply security. Intel chose AMD. This "second source" agreement gave AMD the right to manufacture Intel-compatible chips and launched it as a serious competitor. The deal expired in 1986, beginning decades of legal disputes between the two companies over who owned what intellectual property.

By 2014, AMD was burning through cash, had lost its performance advantage over Intel, and was widely rumoured to be on the verge of bankruptcy. The board appointed Lisa Su as CEO in October 2014. Su, an MIT-trained semiconductor engineer, refocused AMD on data centres and high-performance computing, cancelled underperforming projects, and bet the company on a new chip architecture called Zen. She described her first years as "fixing the foundation before building the house." AMD's stock rose over 3,000% from its 2015 low to its 2021 peak.

AMD launched the MI300X AI accelerator in late 2023 — a chip with 192GB of HBM3 memory and 5.3TB/s bandwidth, offering more memory capacity than NVIDIA's competing H100. Lisa Su described it as "the fastest-ramping product in AMD history." Microsoft, Meta, and Oracle began qualifying it for production workloads. AMD's data centre GPU revenue went from near zero in 2023 to over $5 billion in 2024. For the first time in the AI era, there was a credible alternative to NVIDIA.

In a landmark strategic partnership announced in 2025, OpenAI designated AMD as a "core preferred partner" for AI infrastructure, committing to deploy 6 gigawatts of AMD GPUs — starting with 1 gigawatt of MI450 chips in the second half of 2026. AMD's data centre revenue reached $5.8 billion in Q1 2026 alone — growing sequentially even in AMD's historically weakest quarter, a sign analysts compared to NVIDIA's early AI dominance cycle. AMD guided Q2 2026 total revenue of $11.2 billion. Lisa Su said demand was "sky high." The company that had been weeks from bankruptcy a decade earlier was now a $200 billion chipmaker threatening NVIDIA's AI monopoly.

ARM — Advanced RISC Machines — was founded in November 1990 as a joint venture between Acorn Computers, Apple, and VLSI Technology in a barn in Cambridge, England. Apple needed an energy-efficient processor for its Newton personal digital assistant; Acorn had developed the ARM processor architecture but lacked resources to commercialise it alone; VLSI provided manufacturing expertise. The company began with 12 employees, no revenue, and an architecture that would eventually run inside more devices than any other processor design in history.

ARM adopted a business model unusual in the semiconductor industry: rather than manufacturing chips, ARM licensed its processor architecture to other companies who incorporated it into their own chip designs. ARM earned royalties on every chip sold using its architecture. As the mobile phone market grew from millions to billions of devices, the royalty stream became extraordinary. ARM's design appeared in Nokia phones, Apple iPhones, Samsung Galaxys, and virtually every other smartphone.

ARM went public in April 1998 simultaneously on the London Stock Exchange and NASDAQ. The IPO raised £170 million. ARM's stock rose over 1,000% during the dot-com boom as investors recognised that every mobile device would need an energy-efficient processor — and ARM's architecture was uniquely positioned to provide it. The company had bet on mobile computing before most investors understood what mobile computing would become.

Masayoshi Son's SoftBank acquired ARM in July 2016 for £24.3 billion — at the time the largest ever acquisition of a European technology company. Son described ARM as the "brain" of the internet of things. British politicians worried about a national technology champion passing into foreign ownership. Son promised to double ARM's UK workforce. ARM continued to operate with significant autonomy under SoftBank ownership. Nvidia subsequently attempted to acquire ARM from SoftBank for $40 billion in 2020, but regulators in the United States, United Kingdom, European Union, and China all raised concerns, and the deal collapsed in February 2022.

ARM went public on NASDAQ in September 2023 in the largest technology IPO of the year, valuing the company at approximately $55 billion. Full-year FY2025 revenue (ending March 2025) reached a record $4.007 billion — up 20.6% — with net profit rising 313%, as ARM crossed the $1 billion quarterly revenue milestone for the first time. ARM expected that approximately 50% of all new server chips shipped to top hyperscalers in 2025 would be ARM-based — a dramatic shift from the Intel/AMD dominance of prior decades. Google, Microsoft, and Amazon were all building data center chips using ARM architecture. The barn in Cambridge had become one of the most valuable technology companies in the world — having never manufactured a single chip.