US-listed shares of Arm Holdings jumped nearly 12% in premarket trading on Wednesday after the chip firm projected billions of dollars in annual revenue from its own new artificial intelligence data-center chip.

The new chip marks a pivot for Arm, which has traditionally relied on licensing its designs to companies like Nvidia and Qualcomm and then collecting royalty payments based on the number of units sold.

Unlike current chips that are designed to answer queries as part of a chatbot, Arm’s AGI CPU will be able to handle the data-crunching needs of “agentic AI,” a system that acts on behalf of users with minimal supervision.

Arm expects the data-center chip to generate about $15 billion in annual revenue in about five years, CEO Rene Haas said in an interview with Reuters.

Overall, the company expects revenue of $25 billion and annual earnings of $9 per share in that period, he said.

“Arm has not taken a baby step, say manufacturing a die or chiplet for its customers; it has jumped in with both feet, developing high performance and energy efficient Arm AGI CPUs,” Citigroup analysts said.

“The industry’s move to predictive and, in particular, agentic AI shows the need for more CPUs.”

The emergence of “agentic AI” has already fueled strong demand for similar chips, which are made by companies such as Intel and Advanced Micro Devices.

Shares of Intel rose 3.4%, while AMD rose more than 1%.

Arm is trading at 63.08 times analysts’ estimates for the company’s earnings for the next 12 months, compared with AMD’s 26.64 and Intel’s 71.27, according to data compiled by LSEG.