The investor frenzy over artificial intelligence may reach a crescendo yet with the initial public offering of Arm Holdings. There are signs that the high-tech chip designer is readying for a listing as the market reaches peak hype.
SoftBank Group-backed (ticker: 9984.Japan) Arm is in talks with Intel (INTC) as a potential strategic investor to anchor one of the year’s biggest initial public offerings, Bloomberg and Reuters reported Tuesday, citing sources familiar with the matter. In April, Reuters reported that U.K.-based...
Arm Holdings may be courting chip maker Intel ahead of an IPO, according to reports.
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The investor frenzy over artificial intelligence may reach a crescendo yet with the initial public offering of Arm Holdings. There are signs that the high-tech chip designer is readying for a listing as the market reaches peak hype.
SoftBank Group -backed (ticker: 9984.Japan) Arm is in talks with Intel (INTC) as a potential strategic investor to anchor one of the year’s biggest initial public offerings, Bloomberg and Reuters reported Tuesday, citing sources familiar with the matter. In April, Reuters reported that U.K.-based Arm planned to sell shares on the Nasdaq in a bid to raise $8 billion to $10 billion.
Arm declined to comment and Intel didn’t immediately respond to a request for comment from Barron’s. Shares in SoftBank advanced 5.3% in Tokyo trading on Tuesday.
For Intel, getting in with Arm may be one of the best ways for the chip maker to go head-to-head with Nvidia (NVDA) and Advanced Micro Devices (AMD) in a red-hot AI competition. Shares in Intel rose 1.7% in U.S. premarket trading on Tuesday.
Owned by Japanese technology investor SoftBank since 2016, Arm licenses intellectual property to the likes of Apple (AAPL), Amazon (AMZN), and Samsung (005930.Korea), who use the chip designs in device processors globally. Arm is a linchpin in the global tech industry, designing chips at the very cutting edge and making the group likely to be a major beneficiary of the AI boom, since developing the technology relies on massive amounts of chip processing power.
Nvidia was poised to buy Arm after reaching a deal with SoftBank in 2020, but the takeover was scuppered amid regulatory pressures in early 2022. Shares in Nvidia, another key chip player in the recent AI explosion, have gained 170% this year alone.
Investors have braced for Arm to go public since the Nvidia deal was tanked, and it’s no surprise that current market conditions are catalyzing an IPO now. The question for investors remains at what price Arm may hit public markets—and amid such a fervent frenzy over AI, it could be a huge valuation.
Write to Jack Denton at jack.denton@barrons.com