Shulou(Shulou.com)11/24 Report--

Thanks to CTOnews.com netizen West Window old clues delivery! Beijing time on July 12 afternoon news, According to reports, A number of people familiar with the matter said today, Chip design company ARM is negotiating with Nvidia (Nvidia), Hope Nvidia can become its IPO (IPO) anchor investor.

As early as September 2020, Nvidia reached an agreement with SoftBank Group to acquire ARM for about $40 billion. But Nvidia was forced to cancel the deal last year because of regulatory objections. SoftBank then decided to re-list ARM. ARM is expected to go public in the U.S. as early as September.

In addition to partners such as Intel, NVIDIA also hopes to be a major investor in ARM's IPO and will hold it for a long time, people familiar with the matter said today. ARM was reported last month to be in talks with Intel to become an anchor investor in its IPO.

For now, these potential investors are still negotiating with ARM over their valuations. Nvidia wants to invest in ARM at a valuation of $35 billion to $40 billion, while ARM wants to value it closer to $80 billion, one of the people said.

Analysts said bringing in large anchor investors in the run-up to the IPO would help to continue supporting ARM shares as SoftBank reduces its stake. SoftBank bought ARM in 2016 for £ 24 billion ($32 billion).

Meanwhile, many private tech companies and their advisers are watching closely to see if ARM's IPO will be a resounding success after a year of slumping IPO markets.

Enlisting the advance support of a small number of anchor investors is a popular strategy during a downturn in the IPO market and a way to secure demand for IPOs and placate other potential investors.

ARM and Nvidia declined to comment. A person familiar with the matter said that the negotiations between the two sides have not yet ended and the possibility of a breakdown cannot be ruled out.

ARM's IPO is expected to set the highest valuation in the U.S. IPO market since 2021. In November 2021, carmaker Rivian went public on Nasdaq with an IPO market capitalisation of $70 billion.

ARM was listed in London before SoftBank took it private in 2016. Based on ARM's previous performance as a public company, the IPO is widely seen as less risky than many other startups preparing for an IPO.

Some people close to SoftBank say SoftBank founder Masayoshi Son was personally involved in finding an anchor investor for ARM. In November last year, Son said on SoftBank's second-quarter conference call that he would no longer attend SoftBank's conference call in the future and focus instead on ARM listing matters. Then, the son of righteousness has been running to increase ARM revenue. In April, it was reported that ARM was building its own chips to demonstrate its manufacturing capabilities.

ARM and Nvidia have informed U.S. regulators about the potential investment to allay any potential concerns, the people said. It is understood that the potential investment is not very large and is expected to be only several hundred million dollars.

When Nvidia first announced its plans to acquire ARM in September 2020, regulators in both the US and Europe objected. They argued that the deal could restrict competitors 'access to ARM's intellectual property and give Nvidia access to sensitive information that could benefit competition.

Nvidia is already a customer of ARM, but the intention to invest further in ARM highlights nvidia's larger ambitions: to expand from its current core "graphics processor"(GPU) business to the "central processing unit"(CPU) market.

ARM is keen to bring Nvidia into the IPO and also wants to position artificial intelligence (AI) as central to the company's future growth plans, a person familiar with the matter said. AI will be a key word in ARM's prospectus, the person said. Given Nvidia's position in the AI market, introducing Nvidia is critical.

The move will put Nvidia in more intense competition with Intel, whose CPUs have long dominated the PC and data center markets.

In May, Nvidia became the first chipmaker to reach a $1 trillion valuation. More recently, the company produced its first ARM-designed CPU as part of its so-called superchip Grace Hopper, which is designed specifically for AI and high-performance computing.

Global IPO volumes dropped sharply last year as investors worried about falling stock prices, increased market volatility and uncertain economic prospects. But in recent weeks, trading volumes have picked up again, helped by a rally in stocks.

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