- Wednesday, October 16, 2024
U.K.-based chip designer Arm is aiming to have Nvidia as a cornerstone investor as it moves towards its highly anticipated initial public offering (IPO) this year, according to sources cited by the Financial Times.
Having already established a partnership with AI chip powerhouse Nvidia and Intel, Arm is now seeking the former to take a major stake in the IPO. This move is crucial as Arm looks to make artificial intelligence a key component of its growth strategy, as stated by one of the sources.
Discussions regarding Arm's valuation are ongoing, with Nvidia reportedly aiming for a figure between $35 billion and $40 billion, which is roughly half of Arm's desired valuation.
SoftBank, the Japanese multinational investment holding company, acquired Arm for approximately $32 billion in 2016. After Nvidia withdrew its $40 billion acquisition offer in February 2022, SoftBank announced its intention to pursue an IPO. The involvement of anchor investors such as Nvidia will help bolster support for Arm as SoftBank trims its stake.
Arm confidentially filed for its IPO in late April, with expectations of raising between $8 billion and $10 billion. If successful, this will be the largest listing of 2023, following a lackluster 2022. The IPO is expected to take place in September.
Furthermore, Arm and Nvidia have proactively engaged with U.S. regulators to address any potential concerns over the investment, which is likely to be in the low hundreds of millions of dollars.
Both Arm and Nvidia were approached for comment on the matter.
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