Intel Approached To Take On Key Investor Role In Arm IPO

Intel is reportedly in discussions to become an "anchor investor" in the upcoming Arm public offering along with other potential big backers.

The initial public offering (IPO) of shares in the Brit chip designer is being predicted by many to be one of the biggest of the year, not least because current owner, SoftBank, is aiming for a valuation for Arm at anywhere between $30 billion and $70 billion.

Arm filed for a public listing with the US Securities and Exchange Commission at the start of May, yet the actual timing of the IPO is still uncertain with the clearest guidance being anytime before the end of the year.

Among the big-name investors Arm is courting for the IPO is chip giant Intel, which is being sounded out to become an anchor investor, Reuters reported, meaning that it would take a lead role in buying a significant number of shares and help drum up interest from other investors.

These talks, as well as those with other investors, are said to be at an early stage, and may not come to anything.

Intel told us it does not comment on rumors or speculation, and Arm declined to comment as the company is now in a quiet period leading up to the IPO.

Intel's name has popped up in connection with Arm ownership before. Last year, there was some suggestion that a consortium of companies which make use of the Arm's technology in their products could club together to acquire Arm and keep it neutral, or at least out of the hands of any individual chip company.

Qualcomm appeared to be taking the lead on this, saying it was interested in investing in Arm, and that it could join forces with other chipmakers. Intel CEO Pat Gelsinger also said at a company event that he would be interested in participating in any consortium that emerged to take ownership of Arm.

Intel and Arm signed a technology agreement in April aimed at making it easier for licensees of Arm processor technology to have their product designs turned into chips at an Intel semiconductor fabrication plant using upcoming advanced production nodes such as Intel 18A.

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Interestingly, Arm added former executives of both Intel and Qualcomm to its board at the end of last year, in a move the company said would strengthen its position in the semiconductor ecosystem as it prepared for the public markets.

However Arm is also embroiled in a lawsuit with Qualcomm, accusing it of breaching licenses over the custom CPU core technology it gained when it acquired another Arm licensee, Nuvia, in 2021.

Qualcomm hit back, claiming this was part of a move by Arm to change its licensing model so that it could charge device makers based on the overall value of end products rather than licensing designs to chipmakers.

Whoever takes a stake in Arm as part of its IPO, however, it looks like owner SoftBank intends to remain in control. The company stated: "Arm will continue to be a consolidated subsidiary of SBG [SoftBank Group] following the completion of the proposed initial public offering."

This is consistent with reports from last year that SoftBank intended keep a controlling stake in the chip designer after its public offering, instead looking to raise cash from selling a minority stake to investors.

All of this is happening because SoftBank's original plan to offload Arm to GPU flinger Nvidia was terminated last year, with the two companies blaming intense scrutiny from various national regulators for the deal falling through. ®