SoftBank’s Arm attracts tech giants Amazon, Intel, and Alphabet for IPO investments

Arm, the UK-based chip designer owned by Japanese conglomerate SoftBank Group, has garnered significant interest from major tech companies as it prepares for its most awaited NASDAQ IPO. 

Approximately 10 tech heavyweights, including Amazon.com, Intel, Alphabet, and Nvidia, are engaged in discussions with Arm regarding potential investments in advance of its IPO.

These companies are being considered as potential anchor investors for Arm's IPO due to their strategic relationships and collaborations with the chip designer. However, Softbank is looking forward to a sizable $60 billion market valuation contrary to the $35-$40 billion valuation pitched by Nvidia, according to media reports. 

Arm’s collaborations with tech giants

Amazon.com: Amazon Web Services, the cloud division of Amazon, has developed its own processing chip named Graviton using Arm's architecture. The cloud giant's interest in Arm's IPO reflects its reliance on Arm's technology.

Apple: Arm licenses its technology to Apple, which designs chips for its devices using Arm's architecture. Apple's involvement underscores the significance of Arm's technology in its product lineup.

Intel: In April, Intel Foundry Services announced a partnership with Arm, allowing mobile phone chips and other products utilising Arm's technology to be manufactured in Intel's factories. This collaboration positions Intel as a potential investor in Arm's IPO.

Alphabet's Google Cloud: Google Cloud employs computing chips based on Arm's technology in various services, including machine learning, Android, and its compute engine. Google's interest highlights the value of Arm's technology in cloud computing.

Microsoft: Arm processors power devices running Microsoft's Windows operating system. This connection underscores Arm's role in shaping the ecosystem for Microsoft's products.

Taiwan Semiconductor Manufacturing Co (TSMC): TSMC collaborates with Arm to assist its customers in designing chips for devices and high-performance cloud data centres. TSMC's involvement reinforces its reliance on Arm's technology.

Samsung Electronics: Arm supplies architecture and technology to Samsung for use in its smartphone chips. Samsung's potential investment underscores the importance of Arm's contributions to its chip manufacturing.

Nvidia: Arm has previously noted that Nvidia's data centre processor Grace was built using its Neoverse V2 design. Although Nvidia's attempt to acquire Arm in an $80 billion deal was abandoned in February of the previous year, their collaboration positions Nvidia as a key player in Arm's IPO.

After the release of Q1 2023 results, SoftBank CEO Yoshimitsu Goto stated that Vision Fund will continue to be invested in Arm and believe that once the chip maker gets listed on the NASDAQ, it can significantly contribute to the fund. This indicates that SoftBank will not liquidate all of its Arm holdings and withheld a chunk as long-term investment. 

(With Reuters inputs)