Amazon eyes anchor investor role ahead of Arm IPO
Amazon is reportedly in discussions to become an anchor investor in Arm as the chip designer gears up to go public.
The technology giant is joining the likes of Alphabet, which owns google, and semiconductor companies Nvidia and Intel in the queue to become a major investor in Cambridge-based Arm, according to Reuters.
Arm plays a key role in the realm of cloud computing. Amazon Web Services (AWS), the tech titan’s cloud division, uses Arm’s design to craft its own microchip.
Arm did not immediately respond to City PM’s request for confirmation of the reports. Amazon declined to comment.
Recently, Arm has been in talks with an array of tech powerhouses – estimated to be around 10, now 11 – to potentially secure investments pre-IPO.
The SoftBank-owned company is eyeing up a valuation target of $60bn (£47bn) to $70bn (£55bn).
For Arm, attracting anchor investors is more than funding; it’s a strategic move to bolster relations with their clients and elevate the appeal of their IPO.
Regulatory authorities thwarted Nvidia’s previous attempt to acquire Arm for $66bn (£51bn) last year due to concerns it could harm competition.
Investors will not receive any board seat or control, according to sources close to Reuters.
This IPO could be extremely valuable for Japanese firm SoftBank, which has been grappling with its investment business Vision Fund’s poor performance after several miscalculated gambles on tech startups.
However, SoftBank posted yesterday that Vision Fund has finally become profitable after five consecutive loss making quarters.