Nvidia intends to become an anchor investor in Arm IPO

At present, Arm has filled out its application forms for its initial public offering (IPO), hoping to go public later this year, making it one of the largest IPOs in the United States over the past decade or so. The stock exchange of choice for Arm is NASDAQ, with a target of raising $8-10 billion in funds, under the guidance of Goldman Sachs, J.P. Morgan, Barclays, and Mizuho Financial Group.

Earlier reports suggested that Intel’s executives were in talks with SoftBank to become an anchor investor in Arm’s IPO, but the scope of Intel’s investment, or in what form it would participate, remains unclear. Intel is not the only company with this mindset; according to Financial Times, several industry giants are interested in becoming anchor investors in Arm’s IPO, including Nvidia, which failed to acquire Arm over a year ago for $40 billion in cash and stock.

It is understood that Arm’s owner, SoftBank Group, has invited Nvidia for positive negotiations. Nvidia hopes to invest in Arm with a valuation of $35-40 billion, similar to its initial offer to acquire Arm, but Arm wishes to set the valuation between $70-80 billion, a significant disparity that is currently under negotiation.

Despite the initial acquisition falling through due to significant regulatory challenges, Nvidia and Arm continue to maintain a close relationship, with Nvidia having obtained a license to use Arm’s related IPs for a term of twenty years. Last year, Nvidia’s founder and CEO, Jensen Huang, confirmed that Nvidia would develop a series of CPUs based on the Arm architecture for different application fields, starting from the accelerated computing platform, and eventually extending to robotics, autonomous vehicles, cloud computing, and supercomputers.