Sands Capital Management, LLC - Global Growth on Arm Holdings
Thesis
Arm was purchased because Sands expects agentic AI to create a material inflection in CPU demand. CPUs are better suited than GPUs to scheduling, memory management, tool execution, and the orchestration of agentic workflows. Sands expects Arm's CPU royalties to rise from approximately 10 percent of revenue in 2026 to more than 30 percent by 2031. Energy efficiency, dominant smartphone share, and SoftBank's broader AI ecosystem provide additional strategic advantages.
“We expect agentic AI adoption to drive an inflection in CPU demand, increasing Arm’s CPU royalties from approximately 10 percent of revenue in 2026 to more than 30 percent by 2031.”