U.K.-based Arm is hoping to bring on Nvidia Corp. as a cornerstone investor as the chip designer moves toward an initial public offering this year, the Financial Times reported on Wednesday, citing sources.
AI chip superstar Nvidia
NVDA,
which became one of a handful of companies to reach a market cap of $1 trillion last month, is already an existing partner in the group, along with Intel Corp.
INTC,
but Arm wants it to take a major stake at the IPO, the sources said.
As Arm plans to make artificial intelligence a key part of its plans for growth, the involvement of Nvidia is pivotal, one of the sources the FT quoted said.
Discussions between Arm and investors over its ultimate valuation are ongoing, with one source saying Nvidia was looking for a number between $35 billion and $40 billion, roughly half of what Arm wants.
Japanese multinational investment holding company SoftBank
9984,
purchased Arm in 2016 for roughly $32 billion, and said it would pursue an IPO after Nvidia called off a $40 billion acquisition in February 2022. Big anchor investors such as Nvidia are seen as shoring up support for the chip group as Softbank trims its stake, the FT report said.
Arm confidentially filed for a long-awaited IPO in late April, with Reuters reporting at the time that it wanted to raise between $8 billion and $10 billion, making it the biggest listing so far in 2023, following a lackluster 2022. The listing could come as soon as September, the FT said.
Arm and Nvidia have already been in touch with U.S. regulators to head off any issues over an investment that’s likely to be in the low hundreds of millions of dollars, the report said.
Neither Arm nor Nvidia would comment on the report when contacted by MarketWatch.
Read: Nvidia’s stock could fly to $550 amid ‘robust demand’ across the board in AI, analyst says
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