Nvidia's Arm wrestle – from failed acquisition to possibly anchoring IPO

Nvidia is the latest company reportedly in talks to become an "anchor investor" in Arm's upcoming public offering, nearly 18 months after the GPU maker's bid to acquire Arm fell through.

The Brit chip designer may be listed in New York by parent company SoftBank as early as September, according to the Financial Times, which cites unnamed sources it claims have been briefed on the matter.

It is also claimed that GPU and AI champ Nvidia has now been approached by SoftBank to be an anchor investor in the IPO, meaning it would take a lead role in buying shares and building confidence among other potential investors.

Irony alert: the whole reason for the IPO is that Nvidia's proposed deal to takeover Arm fell through last year. That deal was estimated at the time to be worth $66 billion, which would have made it one of the biggest ever in the technology market.

Nvidia blamed the collapse on the "significant regulatory challenges" it faced in various regions including the US, UK and China, where investigations to scrutinize the potential impact of the merger were opened. It also faced opposition from many in the tech industry, especially other licensees of Arm's chip designs who feared that Nvidia might limit access to them.

Reports last month claimed to identify chip giant Intel as one company that was in discussions with Arm and/or SoftBank to become an anchor investor, although both parties declined to comment. Newswire Reuters said at the time that Arm was in talks with more than 10 companies, including Intel.

• Intel approached to take on key investor role in Arm IPO
• FCA mulls listing rules after Hauser blames 'Brexit idiocy' for Arm's New York IPO
• Arm files for IPO – and SoftBank will retain control
• SoftBank taps Arm CEO Rene Haas for its board of directors

As previously noted, Intel CEO Pat Gelsinger said last year the company would be interested in participating in any consortium that might emerge to buy Arm, as did Korean memory maker SK hynix and smartphone chip outfit Qualcomm, which is a major licensee of Arm's technology.

Whatever happens, it looks likely that SoftBank intends to keep ultimate control over Arm following the IPO. When the chip designer quietly filed for a public listing in May, SoftBank said "Arm will continue to be a consolidated subsidiary of SBG [SoftBank Group] following the completion of the proposed initial public offering," indicating that it intended to retain a majority holding.

Now Nvidia may be seeking to invest at a share price that would put Arm's total value at $35-$40 billion, according to the FT. SoftBank was said to be aiming for a valuation at anywhere between $30 and $70 billion.

Nvidia declined to comment on whether it was involved in discussions over the Arm IPO, and Arm told us it cannot comment as it is in a quiet period leading up to the public offering. SoftBank also declined to comment.

The UK has struggled to convince Arm and SoftBank that the company should be dual-listed in London and New York after the IPO. It was confirmed in March that it will list only in the US for now. ®