ARM Stock Falls 3% After Surging on AI Chip Plans

NVIDIA Reduces Investment, Triggering Market Reaction

British semiconductor design company ARM, which saw a sharp rise in its stock price after announcing plans to develop its own AI chips, faced a decline as NVIDIA significantly reduced its stake.

On February 14 (local time), ARM's stock dropped 3.21%, closing at $159.54 on the New York Stock Exchange. The decline came after NVIDIA revealed in a filing with the U.S. Securities and Exchange Commission (SEC) that it had cut its investment in ARM by nearly half. Following this adjustment, NVIDIA now holds approximately 1.1 million ARM shares, valued at around $175 million at the current price.

The dip followed a 6.06% surge in ARM’s stock on the previous trading day, driven by reports that the company plans to enter the AI chip market, which is currently led by NVIDIA. On February 13, the Financial Times (FT) reported that ARM intends to launch its first AI-specific chips later this year. According to sources, Meta, the parent company of Facebook, is expected to be ARM’s first major customer and has already placed an order in preparation for the anticipated summer release.

ARM has traditionally focused on licensing semiconductor designs rather than producing chips itself. However, by stepping into AI chip production, the company is positioning itself as a competitor in a sector where NVIDIA has held a strong lead. Investors reacted to NVIDIA’s decision to reduce its stake, leading to the stock’s pullback.

Despite the decline, ARM’s move into AI chip development marks a significant change in its strategy. As AI-driven computing becomes increasingly important, competition between ARM and NVIDIA is expected to intensify.