Key Takeaways
- Nvidia shares advanced 1.6% during Wednesday’s premarket session, trading at $177.97
- Arm Holdings unveiled the Arm AGI CPU for data centers, projecting $15B yearly revenue by 2031
- Analysts view Arm’s new processor as complementary to Nvidia’s GPU ecosystem rather than competitive — though potential overlap exists with Nvidia’s standalone Vera CPU lineup
- Amazon Web Services committed to acquiring 1 million Nvidia GPUs for AI inference workloads, a transaction estimated to exceed $50 billion in value
- Nvidia has restarted H200 chip manufacturing for China and is developing a Groq 3 variant for the market, representing approximately $32B in annual revenue potential
Nvidia shares posted gains in Wednesday’s early session, maintaining upward momentum despite Arm Holdings’ debut in the AI chip arena. The development coincided with two significant revenue catalysts that had received minimal market attention.
On Tuesday, Arm unveiled its inaugural data center processor — the Arm AGI CPU — securing Meta Platforms and OpenAI as initial adopters. During an after-hours investor presentation, Arm outlined aggressive growth expectations, forecasting the CPU division will deliver approximately $15 billion in yearly revenue by 2031, contributing to an overall $25 billion revenue target.
Following the reveal, Arm shares surged 12% in premarket activity.
Industry analysts, however, emphasized that Arm’s offering doesn’t directly challenge Nvidia’s primary GPU operations.
According to Benchmark Research analyst Cody Acree, Arm’s strategic direction is “less about catching up to the accelerator wave and more about inserting itself deeper into the architecture that governs how AI infrastructure actually runs.”
Jensen Huang, Nvidia’s CEO, appeared in Arm’s promotional content, describing the companies’ nearly 20-year collaboration as creating “one seamless platform, from cloud to edge to AI factories.”
The competitive landscape becomes more nuanced around Nvidia’s recently introduced Vera CPUs, which debuted at last week’s developer conference. J.P. Morgan’s Harlan Sur noted potential overlap between Arm’s processor and that product category. Sur also highlighted that Meta has already contracted with Nvidia for its Arm-based CPU solutions — creating ambiguity in the competitive dynamics.
Amazon Web Services Commits to Massive Nvidia GPU Purchase
In a parallel development, Amazon Web Services revealed plans to acquire 1 million Nvidia GPUs dedicated to AI inference applications. The announcement caught observers off guard — AWS had previously positioned itself as hosting “the largest cluster of non-Nvidia chips in the world” following its Indiana facility’s October 2025 launch.
The agreement encompasses a “broad mix” of six additional Nvidia processor variants, including the recently announced Groq 3 inference chips, alongside Nvidia’s networking infrastructure. Industry estimates place the complete package’s value comfortably above $50 billion, with completion targeted by late 2027.
This solitary agreement accounts for approximately 25% of Nvidia’s total 2025 annual revenue.
Chinese Market Revenue Returns to Nvidia’s Portfolio
CEO Jensen Huang confirmed last week that Nvidia has recommenced manufacturing of the H200 chip — engineered to meet U.S. export control requirements — targeting Chinese customers. Industry sources additionally suggest a China-compliant Groq 3 chip variant is under development.
Nvidia’s Q1 guidance contained no Chinese data center revenue assumptions. Throughout 2025, these transactions averaged approximately $8 billion quarterly — translating to roughly $32 billion annually, representing about 15% of total 2025 revenue.
The AWS agreement and China market resumption collectively represent more than $82 billion in revenue streams absent from Nvidia’s current financial outlook.
Nvidia shares traded up 1.6% to $177.97 in Wednesday’s premarket session, bouncing back from a 0.3% decline in the previous trading day.
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