Apple, Nvidia and More to Invest in Arm’s IPO: Report

Key clients of Arm Holdings Ltd such as Apple, Nvidia, Alphabet, and Advanced Micro Devices (AMD) have committed to invest in the chip designer’s forthcoming initial public offering (IPO), according to sources speaking with Reuters.

Intel, Samsung Electronics, Cadence Design Systems, and Synopsys have also pledged their participation as investors, as per these sources. The negotiations are still underway and additional investors are being courted for potential involvement.

Arm supplies essential chip designs and licenses technology that is integral to the functioning of over a billion smartphones sold annually.

SoftBank Group, the current owner of UK-based Arm, is aiming for a valuation range of $50 billion to $55 billion for the chipmaker, as earlier reported by Reuters. The targeted valuation is notably lower than the $64 billion SoftBank had assessed when it recently acquired an additional 25% stake in Arm from its $100 billion Vision Fund.

Sources say that each of the strategic investors, including Apple and Nvidia, have agreed to invest sums ranging from $25 million to $100 million. Arm and SoftBank have earmarked 10% of the shares to be sold in the IPO specifically for client companies.

In a twist, Amazon, which had been in discussions about potential investment, has chosen to opt out of the IPO, a source disclosed anonymously.

The IPO has stirred a scramble among the world’s top tech firms, who are all clients of Arm, amplifying questions about the company’s long-standing neutrality in the chip industry. Companies are keen to deepen their commercial ties with Arm, partly to ensure that rivals do not secure an undue advantage.

While these investments won’t offer the companies any board seats or strategic sway over Arm, they could serve to solidify existing relationships and make it more challenging for competitors to acquire the chip design firm in the future.