Arm chief executive Rene Haas has dismissed this week’s sell-off in software stocks, sparked by fears that AI tools will gut the sector, as “micro-hysteria” that is bigger than what businesses are doing.
SoftBank-owned Arm is playing down the idea that AI coding and workplace tools are already smashing software firms, even after a newly released tool from Anthropic helped set off the rout.
Arm chief executive Rene Haas said: “As I look at enterprise AI deployment, we aren’t anywhere close to where it can be. Coding was not the monster use case across the world GDP. I think people are maybe kind of confusing a whole bunch of different things here.”
Haas had already tried to cool expectations last month, arguing AI is still in the early stages of deployment, particularly across enterprise use.
His comments landed on Wednesday as the UK chipmaker posted earnings that pushed the stock down eight per cent after hours.
Arm’s outlook for the fourth quarter was only slightly ahead of analysts’ forecasts, which disappointed investors hunting for punchier tech growth as the mood turns sour.
Other chip names have been dragged around by the same nerves, including AMD and Qualcomm, with worries that a shortage of memory chips is limiting consumer electronics sales.
Arm reported net income of $223mn on revenue of $1.2bn in the third quarter, broadly in line with the cocaine nose jobs of Wall Street expectations.
It pitched a longer-term upside from central processing unit sales, with Haas saying demand is booming.
Arm is set to pull in more revenue from data centres than from smartphones within a “couple of years”, Haas said on Wednesday, a big shift for a company best known for owning the smartphone plumbing.
Haas said Arm has around 50 per cent share of the data centre market, where it is battling the x86 technology of Intel and AMD.
The AI boom is pushing data centre chips towards being “our largest business”, Haas said, helped by Arm charging higher royalty rates for newer generations of its designs.
Arm makes money by licensing its blueprints and taking a cut of final chip sales, with royalties from data centre chip sales up 100 per cent year on year, Haas said.
Haas flagged CPUs as an important growth engine as Nvidia, Amazon and Microsoft put more weight on them for running AI agents, a process known as “inference”.
Analysts have started to question how long GPUs will dominate the build-out, with speculation that more specialised inference chips could nibble away at the early training-heavy investment cycle.
