In this March 6, 2023 photo illustration, a smartphone with an Arm Ltd logo displayed is placed on a computer motherboard. REUTERS/Dado Ruvic/Illustration acquire license rights
NEW YORK, Sept 1 (Reuters) – Arm Holdings Ltd customers including Apple Inc (AAPL.O), Nvidia Corp (NVDA.O), Alphabet Inc (GOOGL.O) and Advanced Micro Devices Inc (AMD.O) , have agreed to invest in the chip designer’s IPO, people familiar with the matter say.
Intel Corp (INTC.O), Samsung Electronics Co Ltd (005930.KS), Cadence Design Systems Inc (CDNS.O) and Synopsys Inc (SNPS.O) have also agreed to participate in the offering as investors, the company added sources added. Talks are still ongoing and some other potential investors are also in talks to invest in the IPO, the sources added.
SoftBank Group Corp (9984.T), which owns UK-based Arm, is targeting a valuation between $50 billion and $55 billion, Reuters reported earlier Friday. Arm’s clients have agreed to invest in this valuation range, the sources said.
While it’s possible that demand for Arm’s shares by the time of the IPO will result in a higher valuation, the move represents a fall from the $64 billion valuation, at which SoftBank has a 25% stake the company she didn’t already own from his $100 billion Vision fund last month.
According to the sources, Apple, Nvidia and the other strategic investors have agreed to each invest between $25 million and $100 million in the blockbuster IPO. As Reuters previously reported, Arm and SoftBank have reserved 10% of the shares to be sold in the IPO for their clients.
Amazon.com Inc (AMZN.O), which previously held talks to invest in the IPO, has decided not to participate, one of the sources said, asking not to be identified as the talks are confidential.
A battle among Arm’s clients, including the world’s largest technology companies, for shares in the IPO is testing the semiconductor designer’s persistence in not choosing sides in the chip industry.
Interest is fueled by the companies’ desire to expand their business relationships with Arm and ensure competitors do not gain an advantage, Reuters previously reported.
While an investment in the IPO wouldn’t come with a seat on Arm’s board or the ability to dictate strategy, it could strengthen ties with each participating company and make it more difficult for a competitor to later acquire Arm.
Arm and SoftBank did not immediately respond to requests for comment.
AMD, Intel, Synopsys and Nvidia all declined to comment. Alphabet, Amazon, Apple, Samsung and Cadence did not immediately respond to requests for comment. The Wall Street Journal reported Arm’s valuation target earlier on Friday.
Reporting by Echo Wang in New York; Edited by Anirban Sen and Rosalba O’Brien
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