why it matters
The move will provide Arm’s parent company, SoftBank, with more capital to make further investments in the start-up. In a recent meeting with investors and analysts, SoftBank Chief Executive Masayoshi Son said the company is ready to go “on the offensive” in the field of artificial intelligence.
In the filing, Arm said $30 billion worth of Arm-made chips were shipped in the last fiscal year. SoftBank will remain the arm’s controlling shareholder.
Arm, a 33-year-old company, develops and licenses blueprints for microprocessors that other companies turn into chips. Its energy-efficient technology played a major role in driving the boom of mobile phones, including every iPhone sold by Apple since 2007.
But Arm technology is also found in a myriad of other products, including home appliances, cars, and industrial equipment. The company estimates that more than 250 billion Arm-based chips were sold.
Arm was a public company until 2016, when SoftBank bought it for $32 billion. Nvidia made its bid for the company in September 2020, but faced vocal opposition from regulators and some major chip companies.
Since that failed acquisition, SoftBank has posted huge losses and lost $3.3 billion in the first quarter of this year. Vision Fund, the technology investment arm of SoftBank, reported a net loss of $3.3 billion, but posted an investment gain of $1.1 billion in the second quarter, following a loss of $23.1 billion a year earlier.
what will happen next
The IPO filing means that ARM can begin to gauge investor interest, which will be key to the share sale. The company will still need to specify how much it plans to raise in the offering, and what valuation it is seeking should it do something closer to a sale.
Rene Haas, who has been Arm’s chief executive since February 2022, has pushed the company to move into more lucrative areas, including data center servers operated by companies such as Amazon. How well that effort is going, as well as potential changes to Arm’s business model to name any high-profile investors and bring in more revenue, is likely to be a key topic for investors studying its offering prospectus.