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Business News/ Companies / News/  Amazon in talks to become cornerstone investor in Arm ahead of IPO: Report
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Amazon in talks to become cornerstone investor in Arm ahead of IPO: Report

Amazon is in talks to become a cornerstone investor in Arm Ltd's IPO, highlighting Arm's significance in cloud computing.

Amazon in talks to become anchor investor in Arm ahead of IPO (AP)Premium
Amazon in talks to become anchor investor in Arm ahead of IPO (AP)

Tech giant Amazon is in discussions to become a cornerstone investor in SoftBank Group Corp's Arm Ltd ahead of its anticipated initial public offering (IPO), sources familiar with the matter have revealed to Reuters.

This previously-undisclosed potential involvement from Amazon underscores Arm's critical role in the realm of cloud computing. Amazon Web Services (AWS), the conglomerate's prominent cloud division, has already developed its own processing chip named Graviton, leveraging Arm's design.

Arm's IPO, expected to transpire in early September on the Nasdaq exchange, has been a subject of considerable attention. The company is aiming to secure funds amounting to an estimated $8-$10 billion, according to earlier reports by Reuters.

Also Read: Amazon Q2 earnings 2023: Company beats Wall Street's estimates, revenue grows 11%

The dialogue regarding investment prior to the IPO has reportedly been extended to around ten technology enterprises, including the likes of Intel, Alphabet and Nvidia, as outlined by previous coverage by Reuters. Notably, these potential investors are not anticipated to gain any significant board representation or authoritative control.

Arm's strategy of engaging cornerstone investors, as insiders affirm, is aimed at augmenting its connections with key clients and thereby enhancing the overall appeal of the impending IPO.

The significance of this IPO extends to SoftBank Group Corp, which is currently engaged in rejuvenating its sprawling Vision Fund after several investments in technology startups failed to yield the expected results.

Also Read: Amazon lays off hundred employees working in Fresh Grocery stores as part of restructuring plan

Notably, SoftBank's intention of listing Arm has persisted since the proposed $40-billion sale of the chip designing firm to Nvidia faced roadblocks last year due to opposition from regulatory authorities in the United States and Europe.

Arm's business fortunes have taken a comparatively favourable turn, as its focus on high-earning data center servers and personal computers has allowed it to outperform the broader chip industry, yielding increased royalty payments.

Both Arm and Amazon have refrained from commenting on these reports of Amazon's potential involvement in Arm's IPO. 

(With Reuters inputs)

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Sounak Mukhopadhyay
Sounak Mukhopadhyay, who also goes by the name Sounak Mukherjee, has been producing digital news since 2012. He's worked for the International Business Times, The Inquisitr, and Moneycontrol in the past. He's also contributed to Free Press Journal and TheRichest with feature articles. He covers news for a wide range of subjects including business, finance, economy, politics and sports. Before working with digital news publications, he worked as a freelance content writer.
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Updated: 09 Aug 2023, 07:38 AM IST
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