Arm IPO: Chip Pioneer Reaches $54 Billion Valuation
Chip designer Arm, known for providing its technology to major mobile customers including Apple, Google, Samsung, and Amazon, has finally priced its initial public offering. Shares in Arm are now available at $51 each, giving the chip creator a valuation of over $54 billion.
The highly anticipated IPO began trading today and is set to close on September 18.
Arm and the Rise of Artificial Intelligence
Arm is not resting on its laurels when it comes to the power of artificial intelligence. As AI continues to revolutionize industries, Arm aims to play a pivotal role by incorporating its technology into chips designed specifically for AI applications.
Nvidia, one of Arm’s customers, expects its revenue to increase by 170% compared to last year, driven by AI chips. This quarter, Nvidia’s sales have already surpassed the previous quarter, reaching a record-breaking $1 trillion in value. This places Nvidia in the same league as tech giants Apple, Alphabet, Amazon, and Microsoft.
The chips developed by Arm are expected to have a price-to-earnings multiple of approximately 104.
Arm is listing 95.5 million American depository shares on the Nasdaq Global Select Market, with SoftBank’s subsidiary holding the majority of outstanding shares (around 90%). Companies such as Google, Apple, Nvidia, and Intel have expressed their intention to purchase the remaining shares.
Similar to many companies in the gaming industry, Arm experienced a slight decline in revenue in its last financial year, with a decrease of less than 1%. However, Arm still generated $2.68 billion in revenue, while net income dropped by 22% to $524 million.
Another British company embracing AI is Scriptic, a London-based studio that has secured $6.2 million in its second seed funding round. Scriptic was an early adopter of generative AI in story-based media.