Arm, the U.K. chip maker acquired by SoftBank in 2016, is set to receive an investment from Nvidia as it prepares for its initial public offering (IPO), according to reports. Nvidia, known for being the first semiconductor firm to reach a $1 trillion valuation, and Intel are expected to come forward as anchor investors for Arm’s New York IPO, which could take place as early as September.
The exact value of Arm is currently under negotiation between potential investors. Nvidia is making a case for a valuation of $35 billion to $40 billion, while Arm believes it should be closer to $80 billion. It is worth noting that back in 2020, Nvidia attempted to acquire Arm for $66 billion, but the bid was ultimately abandoned due to regulatory challenges.
Shares of Nvidia were up by 0.4% in premarket trading. Meanwhile, SoftBank shares closed 2% higher in Japan on Tuesday, reflecting the positive response to the news.
SoftBank initially purchased Arm for $32 billion in 2016. Notable customers of Arm include Nvidia and Apple. The growth plans of Arm revolve around the utilization of artificial intelligence, which has also been a significant factor in driving up the value of Nvidia shares this year, as reported by the Financial Times.
In addition to Nvidia and Intel, there is a possibility that other partners of Arm, including Intel, may take stakes in the IPO as well.