Arm makes money from Arm ISA from:

• License Fees
• Royalties

License Fees are an upfront payment to gain access to Arm ISA. The License Fees for ALAs (Architectural License Agreements) are far more expensive than for TLAs (Technology License Agreements, i.e. stock cores)

Royalties are a % per chip sold which are reflective of the level of Arm IP used. The Royalties for ALAs are far lower than for TLAs. That’s because TLAs holders are using far more Arm IP, whereas ALA holders design the cores/IP themselves

Overall royalties make up a far larger portion of Arm’s revenue, e.g. for 2022: $1.7B in royalties vs $1B for “non-royalties”

Hence why Arm has been increasingly concerned about the rise in ALA holders, especially Qualcomm switching back to their ALA

Sources:

Arm’s statements from SoftBank’s Annual Reports

AnandTech, it is very old but Arm hasn’t changed their business model for ages, just the termology

Here’s some more details from NextPlatform

Full NextPlatform article

Lunar Lake-MX looks like a direct response to Apple’s M Series/Qualcomm’s X Elite

Great to see Intel design a dedicated die for the 8-30W TDP market instead of just reusing their 15-28W TDP design

Although still no direct response to Apple’s M Pro/M Max with huge iGPUs yet from Intel (AMD’s Strix Halo is supposedly coming in 2025)