Amazon.com is in talks to become a cornerstone investor in semiconductor company ARM as the latter prepares to launch an initial public offering (IPO), reported Reuters, citing sources.
The likelihood of Amazon participating in the IPO underlines Arm’s importance in cloud computing, the report said.
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Amazon Web Services (AWS), Amazon’s cloud division, uses Arm’s design to develop its processing chip, called Graviton.
Earlier, it was reported that Arm, which is owned by Japanese investment major SoftBank Group Corp, could launch the IPO next month [September].
Arm is looking to raise up to $10bn (£7.8bn) through the IPO and is eyeing a valuation of between $60bn and $70bn.
Amazon and Arm declined to comment on the development.
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By GlobalDataLater this month, according to the Japanese business newspaper Nikkei, SoftBank Group will formally apply to the US Securities and Exchange Commission for the listing.
As soon as Arm is listed on the market, major global chipmakers such as Apple, Samsung Electronics, Nvidia, and Intel will invest in the company, Nikkei reported.
Currently, SoftBank Group owns 75% of Arm’s stake, with the SoftBank Vision Fund, a division that makes investments in IT firms globally, holding the other 25%.
Up to 15% of the Vision Fund’s Arm shares will be offered for sale in the IPO.
Arm intends to sell each of the major chipmakers a few per cent of the company to welcome them as a medium- to long-term investors.
