Arm designs and licenses the instruction set architecture and blueprints used to create semiconductors for mobile devices, data centers, and automotive systems. The company does not manufacture chips; instead, it provides intellectual property (IP) including CPU, GPU, and NPU designs. Its business model relies on two primary revenue streams: licensing fees and royalties. Customers pay licensing fees for upfront access to Arm's technology, while Arm collects recurring royalties once customers ship Arm-based chips. Royalty rates scale with technology complexity, as advanced architectures like Armv9 and pre-integrated Compute Subsystems (CSS) generate higher rates than older designs. Arm recently expanded its business model to include direct silicon sales with the launch of the Arm AGI CPU, a data center chip designed for AI workloads. This shift moves the company beyond pure IP licensing into selling finished hardware. Smartphones rely on Arm technology as the industry standard, and the company is gaining adoption in high-performance computing. Key business domains include Edge AI for mobile and consumer electronics, Cloud AI for hyperscale data centers, and Physical AI for automotive and robotics. Arm's strategy focuses on capturing higher royalty rates through the transition to advanced IP and expanding its footprint in the data center and automotive markets.