UK chip design company Arm is in negotiations with NVIDIA to be an anchor investor in Arm’s initial public offering, The Financial Times reported last week. The news comes nearly 18 months after NVIDIA ended its attempted acquisition of Arm from Japanese investment company SoftBank due to regulatory hurdles in several countries and Europe.
The original NVIDIA-Arm $66 billion deal was to have taken place in September 2020.
Based in Cambridge, UK, Arm was acquired by Softbank seven years ago in a deal worth £24 billion.
The FT story includes speculation that Intel may also become an Arm anchor investor, with Apple and Microsoft potentially become involved.
The FT quoted Ben Barringer, an analyst at investment company Quilter Cheviot: “Having [Arm] controlled by one industry player was never going to work and thus having anchor investors helps to alleviate that problem. It is unlikely one company will be a dominant anchor investor.”
According to the story in the FT, NVIDIA wants a share price that would place the value of Arm at about $40 billion, whereas Arm seeks a valuation of about twice that amount. NVIDIA’s total investment is likely to be “in the low hundreds of millions of dollars.”
NVIDIA GH200 Grace Hopper Superchip
According to another story in The Guardian, “Anchor investors typically buy shares at an agreed price before an IPO begins, to enhance the stability of an offering and reassure potential investors.”
Arm’s IPO may take place in New York as early as September, the FT reported.
Arm licenses chip designs to semiconductor makers, including Nvidia, whose Grace CPU is Arm-based, while the NVIDIA GH200 Grace Hopper Superchip combines Grace CPU with NVIDI GPU microprocessor technology.
