Nvidia In Talks To Be Anchor Investor In ARM – Report

ARM Holdings is reportedly in talks with its former suitor to bring in GPU giant Nvidia as an anchor investor.

This is according to a report in the Financial Times, and comes as ARM presses ahead with its public listing in New York in September this year.

This is not the first time that reports have surfaced of so-called ‘anchor investors’. Last month it was reported that ARM was in talks with some of its biggest customers and end users about bringing on one or more ‘anchor investors’ in the IPO.

Anchor investors

In June ARM was reportedly talking to at least ten companies, including Intel, Alphabet, Apple, Microsoft, TSMC, and Samsung Electronics, about their potential participation in the IPO.

This was because in May ARM had registered for a US public listing with the US Securities and Exchange Commission – paving the way for one of the largest initial public offerings (IPOs) of the year.

That registration rebuffed the charm offensive from a number of British Prime Ministers to get the firm to consider a dual listing in both London and New York.

The ARM plan to sell its shares on Nasdaq in September, is seeking to raise between $8 billion-$10 billion, it has been previously reported.

ARM owner SoftBank is reportedly seeking a valuation for ARM at anywhere between $30 billion and $70 billion.

That said, SoftBank intends to retain a controlling stake in ARM after the IPO, whoever takes a stake in the chip designer.

Nvidia talks

Now ARM, according to the Financial Times report, is talking with its former suitor, Nvidia, about an anchor investor move.

Nvidia and ARM declined to comment to Reuters on the matter.

According to the FT report, both parties are negotiating over valuation, with Nvidia preferring a stake that would value the firm at between $35 billion and $40 billion, according to one person familiar with the discussions.

The source stated ARM is seeking a valuation closer to $80 billion.

This time Nvidia and ARM have proposed a small minority investment in the low hundreds of millions of dollars and have contacted regulators in advance to allay fears, according to people close to the discussions referenced by the Financial Times.

Former suitor

It should be remembered that in February 2022 Nvidia’s attempted $40bn purchase of ARM was called off, due to “significant regulatory challenges”.

The UK government had led that global challenge to the deal, and indicated it would block it on national security grounds.

Soon after the Nvidia deal fell through, Softbank’s Masayoshi Son in February 2022 indicated that the US Nasdaq would be the most likely listing destination for ARM.

The head of Japan’s SoftBank then reiterated this stance in June 2022.

Dual listed

ARM was formed in 1990 when it was spun out of Acorn Computers, and its chip designs are used in 95 percent of smartphones due to their low power consumption.

This makes ARM a major force in the semiconductor market, and it licensing its designs to some of the world’s largest consumer tech manufacturers including Qualcomm and Apple.

Japan’s SoftBank had acquired ARM for $32bn in 2016.

Before that, ARM was actually dual-listed in London and New York until the 2016 SoftBank acquisition – an acquisition the UK government at the time welcomed, despite concern at ARM falling into the hands of a foreign entity.