Apple, Google, Nvidia and other tech giants are considering buying Arm shares
In this illustration captured on March 6, 2023, a computer motherboard features a smartphone showcasing the logo of Arm Ltd.
Dado Ruvic, a photographer for the Reuters news agency, captured the images found within this blog section.
Arm, a company specializing in designing chips, announced in a filing on Tuesday that tech giants such as Apple, Google's parent company Alphabet, and Nvidia, among others, have displayed a keen interest in acquiring approximately $735 million worth of its shares. This move comes as Arm aims to make its debut on the Nasdaq stock exchange.
The potential investments may not materialize, however, the fact that these companies are contemplating them underscores the significance of Arm. Arm's architectures are utilized in data center servers, consumer gadgets, and industrial goods.
Intel, Samsung, and TSMC, the operators of chip manufacturing plants, are considering the possibility of investing alongside the three technology giants worth trillions of dollars. AMD and MediaTek, who create chip designs using Arm architectures, are also interested. Cadence Design Systems and Synopsys, companies that develop software for processor development, have also shown their interest, as stated in the modified prospectus for Arm's shares sale. Following this deal, Arm may end up with a market capitalization of $52 billion and an additional cash influx of nearly $5 billion.
In the last couple of years, technology companies going public have been infrequent. This is mainly due to increased interest rates, which have resulted in investors being less inclined to take chances on volatile, high-growth businesses. However, Arm is an exception to this trend. Arm was founded in 1990 and had already been listed in both London and New York before being acquired by SoftBank for a mammoth $32 billion in 2016. In the second quarter, it managed to generate a profit of $105 million from $675 million in revenue.
In the year 2020, Nvidia made a declaration about its intentions to purchase Arm from SoftBank for a whopping $40 billion. However, both American and British regulators opposed this move and as a result, the transaction was abandoned by the two companies in 2022. This paved the way for Arm's present initial public offering (IPO) in the United States. To add to their repertoire, Nvidia has launched its very own Arm-centered chip that is capable of functioning in tandem with its in-house graphics processing units.
Despite the inability of Nvidia to acquire Arm, their co-founder and CEO Jensen Huang did not hesitate to highlight the potential of Arm during the IPO roadshow for the chip-design firm.
"Arm is an exceptional corporation, and every individual across the globe is aware of my immense admiration for this company, its platform, franchise, and the exceptional management team," expressed Huang, sporting his distinctive leather jacket in the prerecorded roadshow video.
Nvidia and Arm are teaming up to develop a fresh ecosystem for cloud data centers, as mentioned by Huang. In the past, data center servers have primarily relied on Intel processors.
Huang is not the sole advocate for Arm externally. Rick Tsai, vice chairman and CEO of MediaTek, made an appearance during Arm's online presentation, mentioning that there will be a multitude of future products utilizing the technologies of both firms.
VIDEO: Investment expert shares insights on the potential hazards tied to Arm's IPO.
