Nvidia's Potential Investment in Arm's IPO Signals Expansion into CPUs, Sets Stage for AI-Focused Growth

Softbank Group Corp SFTBF SFTBY backed British chip designer Arm actively seeks anchor investors as it moves forward with its IPO in New York in September.

Nvidia Corp NVDA is among the existing partners that Arm is engaging with to secure a long-term stake in the IPO, Financial Times reports.

Nvidia is seeking a share price that would value Arm at $35 billion - $40 billion, while Arm aims for a valuation closer to $80 billion.

Also Read: Arm Confidentially Filed for Nasdaq Listing

SoftBank, which acquired Arm for $32 billion in 2016, intends to sell down its stake in the company, and having anchor investors would help support the stock during this process.

Arm is likely the most valuable company to go public in the U.S. since Rivian Automotive, Inc RIVN had an initial market capitalization of $70 billion in late 2021.

SoftBank's founder, Masayoshi Son, has taken a personal interest in securing anchor investors for Arm and has been focusing on expanding the chip designer's revenue ahead of the IPO.

Nvidia's interest in Arm goes beyond being a customer, as it indicates the company's ambitions to expand into central processing units (CPUs) and compete more directly with Intel Corp INTC.

The involvement of Nvidia in Arm's IPO would position artificial intelligence (AI) as a significant aspect of Arm's growth plans, aligning with Nvidia's expertise in AI technologies.

Arm's IPO comes when global listing volumes are picking up, driven partly by improved stock prices and renewed investor interest, with Nvidia being a key player in the industry.

Nvidia abandoned acquiring Arm last year after the deal saw fierce opposition from regulators and customers, citing restricted rivals' access to Arm's intellectual property and Nvidia gaining access to competitively sensitive information.

Nvidia, the first chipmaker to hit a $1 trillion valuation in May, recently produced its first CPU using Arm's designs for artificial intelligence and high-performance computing.

Price Action: NVDA shares traded higher by 1.43% at $429.83 on the last check Monday.

Photo via Wikimedia Commons

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