Amazon.com Inc. is in talks to join other technology companies as an anchor investor in the initial public offering of Arm Ltd., according to a person familiar with the matter, as part of preparations for a deal that could raise up to $10 billion.
Amazon is one of several tech companies that have spoken with Arm about supporting the offering, which is expected next month, said the person, who asked not to be identified because the discussions are private. Arm, a chip designer whose customers include some of the world’s largest technology firms, has also held talks with Intel Corp. and Nvidia Corp.
Representatives for Amazon and Arm declined to comment. Reuters previously reported on the discussions involving Amazon.
Arm, owned by SoftBank Group Corp., is preparing for what is expected to be the largest tech IPO of the year. According to Bloomberg, the company has spent months speaking with some of its key customers about joining the offering. Amazon, with its extensive web services network, is one of Arm’s largest customers, favoring Arm-based chips due to their cost and efficiency. Around 40,000 Amazon customers rely on the technology.
Last week, Bloomberg reported that Arm plans to launch an IPO valuing the company at between $60 billion and $70 billion as early as September, aiming to capitalize on the popularity of AI chips. The roadshow is expected to begin in the first week of next month, with pricing details to follow shortly after, according to a person familiar with the matter. Japan’s SoftBank acquired the chip designer in 2016 for $32 billion.
Overall, chip valuations have surged this year, especially for companies involved in artificial intelligence hardware. Nvidia, which produces so-called AI accelerators, has more than tripled its share price this year. The company previously planned to acquire Arm but abandoned the deal last year after facing regulatory hurdles. SoftBank, led by billionaire Masayoshi Son, began pursuing an IPO for Arm after the acquisition fell through.
At the highest estimates, Arm’s IPO would be the largest in the tech sector since Alibaba Group Holding Ltd. in 2014 and Meta Platforms Inc. — then Facebook Inc. — in 2012. Market conditions and the war in Ukraine have impacted recent listings.
Amazon uses Arm architectures in its Graviton server processors, which serve as an alternative to traditional data center chips offered by Intel. Amazon has developed multiple generations of Graviton and other chips using Arm technology.
A key goal for Arm CEO Rene Haas is to capture a larger share of the data center market, which is part of the IPO’s appeal to investors. Arm chips are already widely used in smartphones and other markets where efficiency and low power consumption are critical.
Based on Bloomberg materials