AI’s 2026 dark horse will be open-standard chips

The artificial intelligence boom will upend how chips are made. For decades, the majority of the world's semiconductors have been built on know-how developed by two players. That is starting to change as companies seek out alternatives, including a promising open-source technology known as RISC-V. Pronounced "risk five", it's a niche product at present but could have its breakout moment in the year ahead.

The two dominant "instruction set architectures" that chipmakers currently use are x86, controlled by Intel, and a competing one owned by UK-based Arm. They're essentially a basic language that determines how processors follow software commands and, in turn, run everything from operating systems and apps to algorithms underlying large language models.

As semiconductors become more complex and ubiquitous, charging chip designers to use these proprietary instructions has become a lucrative business. Nearly all smartphone silicon, for instance, is based on Arm architecture; those standards are the reason why developers can easily build multiple versions of an app for different devices and ecosystems. The company's instruction sets are also increasingly used in data centre central processing units. Thanks to booming demand, its total revenue, mainly from licensing and royalty fees, is on track to hit $7 billion in the year to March 2028, up from $4 billion in its 2025 fiscal year, per mean analyst estimates on LSEG.

Technology giants, though, are starting to feel uneasy about this dependence on Arm. One big reason is because the company, which Japan's SoftBank Group acquired in 2016, has chipmaking ambitions and plans to launch a processor, the Financial Times reported, in February, citing sources.

This would put Arm in direct competition with many of its customers, including Nvidia and Qualcomm. In a clear sign that tensions are rising, the latter has alleged the British company was restricting access to its technology. That prompted South Korea's antitrust regulator to "inspect" Arm's local offices as part of an inquiry into its licensing practices, Bloomberg reported, in November, citing sources.

Meanwhile, Chinese firms are racing to cut their dependence on Western-controlled technology and have embraced open-source alternatives that anyone can freely use, study, modify and share. Washington can't easily restrict access to open-standard architecture like it can with US companies' software and tools. The "biggest advantage" of RISC-V, per a Chinese government report in 2024, is that it is "geopolitically neutral". Besides state entities and military-linked research institutions, major firms like Alibaba and Huawei are developing RISC-V chips. They are also playing a greater role in shaping global standards: half of the 23 so-called premier members of the Swiss-based non-profit that governs RISC-V are entities from the People's Republic, according to state media. That means they hold influential board and technical committee seats.

Arm and x86 are well entrenched, though. These incumbents have spent decades building up an ecosystem of software and tools that make it costly for chipmakers to switch. Currently, RISC-V is largely used for lower-end computing, such as in simple microcontrollers found in thermostats, washing machines and other smart gadgets and appliances. Increasingly, it is deployed in individual processors, or cores, that are part of larger and more complex chips that may also feature components based on Arm or x86. In 2024, just $52 billion worth of chips with RISC-V cores were sold, representing a market penetration of 10.4 percent, according to market research firm SHD Group.

Yet as AI models and data centre demands evolve, one emerging advantage of RISC-V is that it is easier to add custom instructions and extensions than with proprietary architectures. In 2025, Nvidia revealed that it aims to expand its programming platform CUDA, used by developers worldwide, to support RISC-V. Though no timeline was announced, that could be a potential major step towards putting the open architecture on an equal footing with x86 and Arm's offerings in high-performance and advanced computing. The three competing standards may be constantly evolving, but the performance gap between RISC-V and the incumbents is narrowing and will essentially close by early 2027 at the latest, reckons SHD Group principal analyst Richard Wawrzyniak, marking an inflection point.

Other companies that are pushing RISC-V towards high-value applications include Chinese e-commerce and cloud computing group Alibaba, which in early 2025 launched a processor developed in-house for data centre servers and autonomous vehicles based on the open architecture. Recent deals involving established chipmakers from Meta to GlobalFoundries and RISC-V startups are also strong endorsements. By 2030, the RISC-V market could top $260 billion, estimates SHD Group. The year ahead could well be when the AI dark horse of open-standard chips emerges into the mainstream.