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Apple, Google, and Nvidia Among Companies Interested in Buying $735 Million in Arm Shares for Nasdaq IPO

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Chip Design Firm Arm Attracts Interest from Tech Giants in $735 Million Share Offering

Introduction

Arm, a chip design firm, has announced that it has received interest from major technology companies such as Apple, Google parent Alphabet, Nvidia, and others in buying up to $735 million in its shares. The company is planning to go public on Nasdaq. While the investments are not guaranteed, this demonstrates the significance of Arm, whose designs are widely used in data center servers, consumer devices, and industrial products.

Investment from Chip Foundry Operators and Others

Intel, Samsung, and TSMC, leading chip foundry operators, are among the companies interested in investing alongside the aforementioned tech giants. Additionally, AMD and MediaTek, which produce chip designs based on Arm architectures, have also expressed interest. Cadence Design Systems and Synopsys, known for their electronic design automation software, have shown interest as well. If the deal goes through, Arm could achieve a market capitalization of $52 billion and gain nearly $5 billion in new funds.

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Arm’s Unique IPO

Technology initial public offerings (IPOs) have been rare in recent years due to higher interest rates, which have made investors less willing to take risks on high-growth companies. However, Arm, founded in 1990, stands out. It was previously listed in London and New York before being acquired by SoftBank for $32 billion in 2016. In the second quarter of this year, Arm generated $675 million in revenue and a $105 million profit.

Nvidia’s Failed Acquisition and Collaboration with Arm

In 2020, Nvidia announced its intention to acquire Arm from SoftBank for $40 billion, but the deal faced regulatory hurdles in the U.S. and the U.K. As a result, the transaction was abandoned in 2022, leading to Arm’s current IPO plans in the United States. Nvidia has since developed its own Arm-based chip that can work in conjunction with its graphics processing units.

Despite the failed acquisition, Nvidia’s CEO Jensen Huang has been outspoken about his admiration for Arm. During the chip-design company’s IPO roadshow, Huang praised Arm and its management team, emphasizing the collaboration between Nvidia and Arm in developing a new cloud data center ecosystem. This partnership aims to compete with Intel, which has traditionally dominated the data center server market.

In addition to Nvidia, Rick Tsai, the CEO of MediaTek, also appeared during Arm’s virtual roadshow, expressing confidence in future joint products between the two companies.

Conclusion

Arm’s upcoming IPO has attracted interest from major technology players, such as Apple, Google parent Alphabet, and Nvidia. The potential investments from these companies highlight Arm’s importance in the chip design industry. With the involvement of chip foundry operators, like Intel and TSMC, as well as other key players like AMD and MediaTek, Arm’s IPO could result in a significant market capitalization and substantial new funding.

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