Amazon in talks to become cornerstone investor in Arm ahead of IPO: Report
1 min read 09 Aug 2023, 06:32 AM ISTAmazon is in talks to become a cornerstone investor in Arm Ltd's IPO, highlighting Arm's significance in cloud computing.
PremiumTech giant Amazon is in discussions to become a cornerstone investor in SoftBank Group Corp's Arm Ltd ahead of its anticipated initial public offering (IPO), sources familiar with the matter have revealed to Reuters.
This previously-undisclosed potential involvement from Amazon underscores Arm's critical role in the realm of cloud computing. Amazon Web Services (AWS), the conglomerate's prominent cloud division, has already developed its own processing chip named Graviton, leveraging Arm's design.
Arm's IPO, expected to transpire in early September on the Nasdaq exchange, has been a subject of considerable attention. The company is aiming to secure funds amounting to an estimated $8-$10 billion, according to earlier reports by Reuters.
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The dialogue regarding investment prior to the IPO has reportedly been extended to around ten technology enterprises, including the likes of Intel, Alphabet and Nvidia, as outlined by previous coverage by Reuters. Notably, these potential investors are not anticipated to gain any significant board representation or authoritative control.
Arm's strategy of engaging cornerstone investors, as insiders affirm, is aimed at augmenting its connections with key clients and thereby enhancing the overall appeal of the impending IPO.
The significance of this IPO extends to SoftBank Group Corp, which is currently engaged in rejuvenating its sprawling Vision Fund after several investments in technology startups failed to yield the expected results.
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Notably, SoftBank's intention of listing Arm has persisted since the proposed $40-billion sale of the chip designing firm to Nvidia faced roadblocks last year due to opposition from regulatory authorities in the United States and Europe.
Arm's business fortunes have taken a comparatively favourable turn, as its focus on high-earning data center servers and personal computers has allowed it to outperform the broader chip industry, yielding increased royalty payments.
Both Arm and Amazon have refrained from commenting on these reports of Amazon's potential involvement in Arm's IPO.
(With Reuters inputs)
