Nvidia shares were rising early on Wednesday. The chip maker was shrugging off the entry of Arm Holdings into the artificial-intelligence processor market.
Arm announced a new data center central-processing unit (CPU) on Tuesday, the semiconductor design company's first foray into making its own chips. Meta Platforms and OpenAI -- both significant clients for Nvidia -- will be among the first customers for the chip, called Arm AGI CPU.
However, Arm's CPU doesn't look like a direct competitor with Nvidia's graphics-processing units, which are the main source of revenue for the company. Instead, Arm's new chip could compete with Nvidia's stand-alone Vera CPUs which the company launched last week at its developer conference, with Meta among its early customers.
"We view the ARM entry into server CPU development constructively, as we see it is significantly incremental to the [Arm's] existing total addressable market with limited customer channel conflicts," KeyBanc analyst John Vinh wrote in a research note.
Nvidia shares were up 1.4% at $177.29 in premarket trading Wednesday, while S&P 500 futures were up 0.8%.
