Arm’s biggest customers are also backing a rival chip design — here’s what you need to know
Dado Ruvic | Reuters
With Arm slated to start trading on the Nasdaq on Thursday, investors are considering the potential upsides — and downsides — of investing in the company.
The British chip designer itself flagged several risks in its IPO prospectus, ranging from its China business to geopolitics, but one potential threat has gained traction as its listing nears.
It’s called RISC-V, pronounced “risk five” — a rival chip design that is backed by some of Arm’s own customers.
While analysts told CNBC it’s not an immediate threat, Arm itself warned that if it gains traction, it could pose a competitive risk.
What is RISC-V?
To understand RISC-V, let’s consider what Arm actually does. Arm designs what’s known as an instruction set architecture (ISA) for chips known as processors or central processing units (CPUs). These chips can be thought of as the brain of an electronic device.
Arm’s ISA is effectively the blueprint for processors that other companies, from Apple to Qualcomm, base their chips on.
Arm charges these companies licensing fees to use its technology to build their own chips. It also gets royalties when these chips are produced and go into end devices. Arm’s designs underpin processors in 99% of the world’s smartphones.
RISC-V, meanwhile, is an entirely different instruction set architecture. RISC stands for reduced instruction set computer.
The main difference is that RISC-V is open-source, meaning it’s free to use.
“If RISC-V-related technology continues to be developed and market support for RISC-V increases, our customers may choose to utilize this free, open-source architecture instead of our products,” Arm said in its IPO prospectus.
Is RISC-V gaining traction?
RISC-V in recent years has gained support from some of the world’s biggest technology companies, many of which are also Arm customers.
Google, Samsung, Qualcomm and Nvidia, for instance, are part of a consortium formed in 2020 to develop RISC-V-based technologies.
Arm warned that if this development is successful, there could be a viable alternative to its architecture.
“Although the development of alternative architectures and technology is a time-intensive process, if our competitors establish cooperative relationships or consolidate with each other or third parties, such as the recently announced joint venture focused on RISC-V, they may have additional resources that would allow them to more quickly develop architectures and other technology that directly compete with our products,” Arm said in its IPO prospectus.
Support for RISC-V was “galvanized” after Nvidia proposed to buy Arm for $40 billion in 2020, according to technology researcher Richard Windsor, founder of Radio Free Mobile.
He suggested that other players were worried that if a major customer like Nvidia controlled Arm, it could be a disadvantage to some of Nvidia’s rivals.
The proposed takeover “raised a lot of hackles in the industry” and some Arm customers are “starting to think twice” about their dependency on the company, Windsor told CNBC this week.
“Maybe we should have a second source just in case things start not going in our direction, or we have problems with Arm,” he added, in reference to the thinking among some Arm customers.
Is RISC-V a threat to Arm?
The general consensus is that, right now, RISC-V doesn’t pose a major threat to Arm. That’s because the technology is currently far inferior to Arm’s offering.
“The issue with RISC-V is it’s much more immature. It doesn’t have the same level of support for more advanced designs,” Peter Richardson, research director at Counterpoint Research, told CNBC.
“RISC-V is quite far away from being at that leading edge, but for some workloads not at the cutting edge, then RISC-V can work quite well.”
One of Arm’s big successes is its huge customer base of major tech players. This has allowed Cambridge, England-based company to build an “ecosystem” of companies that rely on its technology — an advantage that RISC-V doesn’t have.
“Whenever you devise software that runs on one Arm, it will run on all the others as well,” Herman Hauser, founder of Acorn Computers, the company behind the first Arm chip, told CNBC’s “Squawk Box Europe” on Thursday. “So I think Arm will continue to retain its dominant position.”
However, there are fears that Chinese companies in particular could view RISC-V as a cheaper — and more appealing — alternative, particularly if Arm increases its prices.
“If Arm raises its prices, what are chip designers in China going to do? They’re probably going to go for the free version. I wouldn’t be surprised if China really scales up on RISC-V,” Cyrus Mewawalla, head of thematic intelligence at Global Data, told CNBC this week.
Amazon Web Services is set to announce an update to its Graviton4 chip that includes 600 gigabytes per second of network bandwidth, what the company calls the highest offering in the public cloud.
Ali Saidi, a distinguished engineer at AWS, likened the speed to a machine reading 100 music CDs a second.
Graviton4, a central processing unit, or CPU, is one of many chip products that come from Amazon’s Annapurna Labs in Austin, Texas. The chip is a win for the company’s custom strategy and putting it up against traditional semiconductor players like Intel and AMD.
But the real battle is with Nvidia in the artificial intelligence infrastructure space.
At AWS’s re:Invent 2024 conference last December, the company announced Project Rainier – an AI supercomputer built for startup Anthropic. AWS has put $8 billion into backing Anthropic.
AWS Senior Director for Customer and Project Engineering Gadi Hutt said Amazon is looking to reduce AI training costs and provide an alternative to Nvidia’s expensive graphics processing units, or GPUs.
Anthropic’s Claude Opus 4 AI model is trained on Trainium2 GPUs, according to AWS, and Project Rainier is powered by over half a million of the chips – an order that would have traditionally gone to Nvidia.
Hutt said that while Nvidia’s Blackwell is a higher-performing chip than Trainium2, the AWS chip offers better cost performance.
“Trainium3 is coming up this year, and it’s doubling the performance of Trainium2, and it’s going to save energy by an additional 50%,” he said.
The demand for these chips is already outpacing supply, according to Rami Sinno, director of engineering at AWS’ Annapurna Labs.
“Our supply is very, very large, but every single service that we build has a customer attached to it,” he said.
With Graviton4’s upgrade on the horizon and Project Rainier’s Trainium chips, Amazon is demonstrating its broader ambition to control the entire AI infrastructure stack, from networking to training to inference.
And as more major AI models like Claude 4 prove they can train successfully on non-Nvidia hardware, the question isn’t whether AWS can compete with the chip giant — it’s how much market share it can take.
The release schedule for the Graviton4 update will be provided by the end of June, according to an AWS spokesperson.
Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., speaks to the Economic Club of New York in Manhattan, New York City, on April 23, 2024.
Mike Segar | Reuters
JPMorgan Chase is taking a step further into the cryptocurrency space with its own stablecoin-like token, called JPMD.
The U.S. banking giant told CNBC on Tuesday that it’s planning to launch a so-called deposit token on Coinbase’s public blockchain Base, which is built on top of the Ethereum network. Each deposit token is meant to serve as a digital representation of a commercial bank deposit.
JPMD will offer clients round-the-clock settlement as well as the ability to pay interest to holders. It is a so-called “permissioned token,” meaning it is only available to JPMorgan’s institutional clients — unlike many stablecoins, which are publicly available.
“We see institutions using JPMD for onchain digital asset settlement solutions as well as for making cross-border business-to-business transactions,” Naveen Mallela, global co-head of Kinexys, J.P. Morgan’s blockchain unit, told CNBC Tuesday.
“Given the fact that deposit tokens would eventually be interest bearing as well, this would provide better fungibility with existing deposit products that institutions currently use,” he added.
Deposit token vs. stablecoin
JPMorgan said the benefit of launching a deposit token over a stablecoin is that it gives institutional clients a way to move money around faster and easier while still having a close connection with traditional banking systems.
A stablecoin is a type of digital token that’s designed to be pegged 1:1 to the value of a fiat currency at all times. The most popular stablecoins are Tether’s USDT and Circle’s USDC. The entire stablecoin market is worth approximately $262 billion, according to data from CoinGecko.
In the U.S., stablecoins remain broadly unregulated — although this is likely to change soon. The Senate is set to vote Tuesday on the GENIUS Act, legislation that would introduce formal regulation for such tokens.
Elsewhere, the European Union regulates stablecoins under its Markets in Crypto-Assets Regulation, or MiCA, while the U.K. has also laid out plans to regulate the crypto industry. Britain’s Financial Conduct Authority is currently consulting on proposals to require stablecoin issuers to ensure their tokens maintain their value against a given asset.
JPMorgan’s digital asset chief told CNBC that the bank chose Coinbase as its blockchain partner since the crypto exchange is already a long-standing client and a leader in the crypto space.
JPMD has had “preliminary interest from large institutional players who want more native onchain cash solutions from pre-eminent and reputed financial institutions,” Mallela added.
Speculation had been building around JPMorgan’s new crypto offering after a trademark application filed by the bank for “JPMD” was made public Monday.
The trademark outlined a broad range of crypto services under the JPMD name, including trading, exchange, transfer and payment services for digital assets.
Various crypto media outlets had speculated whether the bank was about to launch its own stablecoin. However, JPMorgan says that, while its token may share some similarities with a stablecoin, it’s ultimately a different kind of product.
From left, Cliff Obrecht, Canva’s co-founder and chief operating officer, and George Howes, co-founder and CEO of MagicBrief, pose for a photo at the Cannes Lions festival in Cannes, France, in June 2025.
Canva
Canva has grown into a $32 billion startup through its popular design tools used for easily creating images, marketing material and presentations.
Now the company, with its 12th acquisition, is buying its way into the analytics market.
Canva said on Tuesday that it’s buying MagicBrief, whose technology is used for analyzing ad performance, for an undisclosed sum. With MagicBrief, companies can track spending and engagement on their ads and see what’s working well for competitors.
Around 240 million people use Canva’s products, which compete with offerings from Adobe’s Creative Cloud. The company has been deepening its capabilities in artificial intelligence, incorporating it into photo editing, coding and by incorporating chatbots.
“We feel like, especially with AI, we can really democratize marketing and allow marketers to do a lot more with less,” Cliff Obrecht, Canva’s co-founder and chief operating officer, said in an interview.
Canva, which ranked fifth on CNBC’s latest Disruptor 50 list, has raised over $560 million, and was valued most recently at $32 billion, though that’s a step down from its peak of $40 billion in 2021, when private markets were at their frothiest. Obrecht said the company has $1 billion in the bank.
Canva plans to incorporate MagicBrief into a broader product that it will announce later this year, Obrecht said. In October, Adobe announced the availability of a tool for creating ads with AI and then tracking performance.
Meanwhile, Alphabet, Amazon, Meta and Reddit are all pushing generative AI systems to boost the reach of online ads. Some marketers have used Meta’s offerings to tweak the visual appearance of their ads with hopes of gaining traction with certain audiences, CNBC reported in December.
Founded in 2022, MagicBrief has 14 employees and is based in Canva’s hometown of Sydney, Australia. In 2023, the company announced a $2 million funding round, with investments from Archangel and Blackbird, which was Canva’s first investor. The startup has tens of millions of dollars in annualized revenue, Obrecht said.
Canva, which started up in 2013, has 5,500 employees, with over $3 billion in annualized revenue. It’s one of the companies that venture capitalists are most excited about as an IPO candidate, but Obrecht said there won’t be an offering this year.
The focus, he said, is winning “over the next 10 years,” and not just hitting quarterly numbers.
“We feel that’s very short-sighted, and public markets do gravitate you more to quarter-on-quarter performance,” he said.
— CNBC’s Jonathan Vanian contributed to this report.
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