Softbank needs money and wants to take processor developer ARM public. Amazon.com is now preparing to secure a large block of shares before public trading. Reuters reports, citing insiders. ARM develops processor designs, but does not manufacture the chips itself, but leaves that to third parties. It also licenses its designs to third parties, who can then develop them further and adapt them to their own wishes.
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It is not known how far the negotiations with Amazon have progressed, or what share it would like to secure in ARM. According to the report, the companies involved have not commented on the rumor. For its cloud division AWS (Amazon Web Services), Amazon uses self-developed processors called Graviton, which are based on ARM designs. A significant stake in ARM could protect Amazon from ARM’s nasty licensing claims. The processor developer is trying to significantly increase its license fees. As part of that effort, ARM has sued one of its biggest customers: Qualcomm. ARM accuses Qualcomm of developing ARM processors without a valid license. Qualcomm has a license – but maybe not the right one anymore.
Really big IPO
At the end of April, ARM filed its application for an IPO in the US. Perhaps as early as September, ARM’s IPO is set to become one of the largest in tech history. Owner Softbank hopes for a company valuation of 60 to 70 billion US dollars, managers are even said to be dreaming of 80 billion. Even the lower range would be a doubling: In 2017, Softbank bought ARM for $30 billion.
Three years later, Softbank sold ARM to Nvidia for almost $40 billion. However, the calculation was made without the landlord: not only competition authorities in several countries opposed the merger, important customers were also strictly against it. In 2022, Nvidia canceled the ARM takeover with a billion-dollar loss.
Therefore, Softbank is now aiming for a (partial) sale via the stock exchange. This is an opportunity for Nvidia to make a second attempt on ARM. Nvidia would also like to secure a block of shares in the run-up to the IPO, but the values in July were still far apart. Intel is also said to have increased interest.
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