In this illustration dated March 6, 2023, a smartphone with an Arm Ltd logo displayed is placed on a computer motherboard. Portal/Dado Ruvic/Illustration acquire license rights
NEW YORK, Sept 1 (Portal) – 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 as investors in the offering, they added Add sources. Discussions 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 U.K.-based Arm, is seeking a valuation of between $50 billion and $55 billion, Portal reported earlier on Friday. Arm’s customers agreed to invest in that valuation range, the sources said.
While it is possible that demand for Arm shares will result in a higher valuation by the time of the IPO, this move represents a decline from the $64 billion valuation at which SoftBank took its 25 percent stake acquired the company it didn’t already own from its $100 billion Vision Fund last month.
According to the sources, Apple, Nvidia and the other strategic investors have agreed to invest between $25 million and $100 million each in the blockbuster IPO. As Portal 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 had previously held talks about investing in the IPO, has decided not to participate, one of the sources said, requesting anonymity because the talks are confidential.
A competition among Arm’s customers, 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.
The interest is being fueled by companies’ desire to expand their relationships with Arm and ensure that competitors do not gain an advantage, Portal previously reported.
While investing 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 harder for a competitor to take over Arm later.
Arm and SoftBank did not immediately respond to requests for comment.
AMD, Intel, Synopsys and Nvidia declined to comment. Alphabet, Amazon, Apple, Samsung and Cadence did not immediately respond to requests for comment. The Wall Street Journal reported on Arm’s valuation target on Friday.
Reporting by Echo Wang in New York; Edited by Anirban Sen and Rosalba O’Brien
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