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Nvidia is negotiating with Arm to become the anchor investor of its IPO

Update time : 2023-07-13 11:29:55

On July 12, it was reported that many insiders said today that ARM, a chip design company, was negotiating with Nvidia, hoping that Nvidia could become an anchor investor in its IPO.

As early as September 2020, Nvidia reached an agreement with SoftBank Group to acquire ARM at a price of about $40 billion. However, Nvidia was forced to cancel the transaction last year due to the opposition of the regulatory authorities. Subsequently, Softbank decided to relist ARM. It is expected that ARM will go public in the United States as early as September this year.
Currently, these potential investors are still in negotiations with ARM regarding their valuation. One of the insiders said that Nvidia hoped to invest in ARM at a valuation of $35 billion to $40 billion, while ARM hoped that its valuation would be close to $80 billion.
At the same time, after a year of downturn in the IPO market, many private technology companies and their consultants are closely monitoring whether ARM's IPO can achieve a complete victory.
During a downturn in the IPO market, seeking the prior support of a few anchor investors is a popular strategy and a way to ensure IPO demand and appease other potential investors.
ARM and Nvidia declined to comment. A person familiar with the situation stated that the negotiations between the two sides have not yet ended, and the possibility of a breakdown cannot be ruled out.
It is expected that ARM's IPO is expected to set the highest valuation in the US IPO market since 2021. In November 2021, automaker Rivian went public on NASDAQ, with an IPO market value of $70 billion.
Prior to SoftBank's privatization of ARM in 2016, ARM had already been listed in London. Based on ARM's previous performance as a listed company, it is widely believed that compared to many other start-up companies preparing for an IPO, the risk of ARM's IPO this time is relatively small.
In September 2020, when Nvidia first announced its plan to acquire ARM, regulators in the United States and Europe expressed their opposition. They believe that this transaction may restrict competitors' access to ARM's intellectual property rights and allow Nvidia to obtain sensitive information that is conducive to competition.
This will make Nvidia more competitive with Intel, whose CPU has long dominated the PC and data center markets.
In May this year, Nvidia became the first chip manufacturer with a valuation of $1 trillion. Recently, the company produced the first CPU designed with ARM as part of its so-called super chip Grace Hopper, which is designed for AI and High-performance computing.
Last year, global IPO trading volume significantly decreased due to concerns among investors about the decline in stock prices, intensified market volatility, and uncertain economic prospects. But in recent weeks, thanks to the rebound in the stock market, trading volume has started to rebound again.

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