Arm's biggest customers are also their biggest competitors. Apple and Qualcomm use their ISA license instead of their Core architecture license. ISA license pays a much smaller royalty fee.

Now that Apple and Qualcomm both design their own custom cores, Arm's custom core license business is suffering. The only other company that license their custom cores for phones is Mediatek. Arm still has hyperscalers in Google, AWS, Microsoft, and Meta for server core licenses though. But that might not last as long since everyone wants to differentiate and design their own cores. Apple and Qualcomm are succeeding in designing better custom cores than original Arm cores.

So Arm's business model has to change if they want to survive.

Either they make ISA license fees much higher (risk losing customers to RISCV) or they make their own CPUs and compete against their own customers even more.

I enjoy analyzing chip companies and businesses. I've never invested in Arm's stock because their customers are also their competitors. Ultimately, the questions for Arm investors are:

1. Do you believe they can design better cores than Apple and Qualcomm (and other big tech)?

2. Do you think that the threat of companies moving to RISC-V is real if Arm raises ISA royalties?