Arm Allegedly in Talks with Nvidia and Intel to Become Anchor Investors

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Two leading chip designers may become anchor investors of Arm.

The Arm logo
(Image credit: Arm Holdings)

As Arm is gearing up for its IPO at New York Stock Exchange later this year, it is allegedly courting Intel and Nvidia in an attempt to attract them both to become its anchor investors, according to reports from Bloomberg and Financial Times. Attracting anchor investors can drive the valuation of SoftBank-backed Arm, which is facing competition from multiple directions amid a semiconductor market slump.

Negotiations around Arm's valuation are ongoing between the potential investors and Arm. Nvidia, which failed its $66 billion takeover of Arm in 2022, is interested in a share price that reflects Arm's overall value between $35 billion and $40 billion, Financial Times reports citing a source familiar with these conversations. Meanwhile, Arm's aspirations are higher, closer to a valuation of $80 billion. 

Arm is aiming to generate up to $10 billion through a listing in New York later this year. Incorporating anchor investors like Intel and Nvidia can boost enthusiasm and drive momentum in an IPO, particularly when the market for new listings is challenging. Should the negotiations prove fruitful, Intel and Nvidia would be noted in Arm's IPO prospectus prior to the listing, which would maintain stability in the stock's value.

Masayoshi Son, SoftBank's founder, has been personally engaged in securing anchor investors for Arm as he focused on boosting the chip designer's revenue prior to its IPO, according to the Financial Times.

Arm and Nvidia have reportedly reached out to U.S. regulators to pre-emptively address any potential issues regarding what is anticipated to be a minority investment of a few hundred million dollars, FT reports. Previously authorities in the U.S. and Europe prevented Nvidia from taking over Arm over concerns of limited access to Arm's IP for competitors. Apparently, Nvidia still wants a piece of Arm, but it is now more eager to negotiate about the price as it gets only a take. 

So far, neither Arm nor Intel nor Nvidia commented on the talks according to Bloomberg and Financial Times.

Anton Shilov
Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

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13 Comments Comment from the forums
  • P1nky
    Since this is not a site specialized on stocks or investing, maybe it would be appreciated if you didn't use terms your readers might not understand, like anchor investor, without explaining it.
    Reply
  • NeoMorpheus
    Oh boy, is ARM swimming with the sharks covered in blood on this one.

    Maybe they should ask their buddies at Apple how nice it is to work with ngreedia and intel.

    I'm pretty sure they had lots of nice things to say...
    Reply
  • Kamen Rider Blade
    RISC-V is coming for ARM's market, and it knows that it's days are numbered.
    Reply
  • bit_user
    NeoMorpheus said:
    Oh boy, is ARM swimming with the sharks covered in blood on this one.
    Well... Nvidia is a major ARM customer. So, they have deep vested interests in keeping ARM well-resourced and continuing to produce the IP Nvidia needs.

    Intel is the oddball, here. The only interest I can see Intel having in ARM (given that I no longer think it likely Intel will design its own ARM ISA cores) is in ARM as a fab customer. Is that enough? Maybe, if they expect to take a significant chunk of the mobile SoC market from TSMC fabs.

    NeoMorpheus said:
    Maybe they should ask their buddies at Apple how nice it is to work with ngreedia and intel.
    There's no equivalence between the investing in a company vs. being its supplier.
    Reply
  • bit_user
    Kamen Rider Blade said:
    RISC-V is coming for ARM's market, and it knows that it's days are numbered.
    It's a long-term threat. Right now, ARM enjoys a lock on the phone market, deep penetration into self-driving and robotics SoCs, and is the only viable cloud alternative to x86. That's not a bad position to be in.

    ARM's main problem is that its business model hasn't supported the kind of revenue levels that traditional chip companies have garnered. That's why it's suing Qualcomm over Nuvia's architectural license, in order to try and extract royalties from its downstream customers. It's a "Hail Mary", but if ARM were to prevail, it'd be huge for them (in the short/medium term, anyway).

    Its second problem is longer-term: the way its patents have been shown to be vulnerable to exploitation by governments engaged in trade disputes and security concerns. That was a really bad precedent, and I wish ARM had sued the US to get it overturned. I'm sure that put China and many others off the idea of using ARM-based CPUs for their critical industries and infrastructure.

    Unfortunately, the Qualcomm/Nuvia lawsuit has poured cold water on any US-based firms introducing new ARM ISA CPUs (chiefly Intel & AMD), after the patent/trade dispute already turned off foreign firms and governments from jumping on the ARM bandwagon.

    So, I agree that the brightest days of the ARM ISA are possibly behind it, but not because RISC-V is actually better. Mostly due to business and trade reasons. I've seen no technical analysis which supported the idea that RISC-V is better than AArch64.

    BTW, ARM can always pivot and get into the RISC-V IP market. It probably wouldn't be as lucrative for them, but as long as they have the expertise and there's money to be made, it should remain an option.
    Reply
  • Kamen Rider Blade
    bit_user said:
    So, I agree that the brightest days of the ARM ISA are possibly behind it, but not because RISC-V is actually better. Mostly due to business and trade reasons. I've seen no technical analysis which supported the idea that RISC-V is better than AArch64.

    Jim Keller on How Risc-V Will Change the World
    I think the Free & open nature of RISC-V will eat into the ARM market very soon, especially in server.

    Why pay ARM when you can do the same for free after you re-factor your code to work with RISC-V and not be "Beholden" to ARM in any way financially or technologically.
    Reply
  • bit_user
    Kamen Rider Blade said:
    Why pay ARM when you can do the same for free after you re-factor your code to work with RISC-V and not be "Beholden" to ARM in any way financially or technologically.
    Those fall squarely in the category of the "business and trade reasons" I cited.

    The downside of RISC-V is a more splintered ecosystem. And we've already seen some chip designers try to push their nonstandard extensions into opensource key toolchains and libraries. I'm not saying it's enough to stall out RISC-V, just that there's no free lunch.
    Reply
  • Kamen Rider Blade
    bit_user said:
    Those fall squarely in the category of the "business and trade reasons" I cited.

    The downside of RISC-V is a more splintered ecosystem. And we've already seen some chip designers try to push their nonstandard extensions into opensource key toolchains and libraries. I'm not saying it's enough to stall out RISC-V, just that there's no free lunch.
    Alot of Upper Management C-Suite "Bean Counters" in those businesses are going to look at:

    RISC-V = Free
    ARM = Pay them royalties

    They're going to push their devs to go with the "Free" option.
    Reply
  • bit_user
    Kamen Rider Blade said:
    Alot of Upper Management C-Suite "Bean Counters" in those businesses are going to look at:

    RISC-V = Free
    ARM = Pay them royalties

    They're going to push their devs to go with the "Free" option.
    Nothing is free, in that sense. You always have to pay somebody for IP. It's just a question of who and how much.

    If you license RISC-V IP, you're still paying someone like SiFive or Tenstorrent for it. You can design your own (as Western Digital did - one of RIISC-V's early adopters), but then you're paying a staff to design your IP.

    The point about Western Digital isn't a small one. Royalties are most painful on high-volume, low-margin products. That's why RISC-V has dominated the microcontroller and embedded core market, first. As you move up the value chain, ISA licensing fees potentially become a much smaller piece of the pie. That's why ARM seemed to have a lock on the phone and server markets, until the two game-changing events I mentioned above.
    Reply
  • NeoMorpheus
    bit_user said:
    Well... Nvidia is a major ARM customer. So, they have deep vested interests in keeping ARM well-resourced and continuing to produce the IP Nvidia needs.
    That might be the case, but every time I hear ngreedia working with *insert foolish company name here that dared working with them*, all I can think of is the tale of the scorpion.

    skbmXIzxcZYView: https://www.youtube.com/watch?v=skbmXIzxcZY
    Reply