ARM CEO tries to deflect call for IPO
Segars sought to refute the argument that a public offering of shares in ARM – which would keep the company independent – would be a better outcome. In recent weeks executives at licensee companies have said they would invest and support an ARM IPO that would keep the processor licensor independent (see Qualcomm, others would invest in ARM IPO).
SoftBank Group, ARM’s owner and Nvidia agreed a sale for $40 billion in September 2020. The deal is subject to regulatory oversight in Europe, China and the US and is expected to close by mid-2022.
However, a number of licensees of ARM have raised concerns that if the deal goes through they would be licensing their technology from a subsidiary of a company with which they are competing. Others are concerned that there would nothing to stop Nvidia from reducing investment in the UK and removing the technology to the US.
Segars said that ARM had been public before but that the short-term requirements of meeting shareholders’ expectations prevented the levels of long-term investment that ARM needs to make to take advantage of the opportunities ahead.
“The initial investments came when SoftBank acquired Arm; it enabled us to build new technologies that expanded our reach into data centers, the automotive and networking industries, all while retaining our leadership in mobile.” Segars argued.
“We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast and innovate. Combining with Nvidia will give us the scale, resources and agility needed to maximize the opportunities ahead.”
Segars added that ARM would remain headquartered in the UK but did not say for how long. He also said that Nvidia will not siphon investment away from the UK. “Instead, it will invest in the expansion of ARM’s Cambridge HQ and build a world-class AI research facility,” Segars said adding that the combination of ARM and Nvidia in Cambridge would make the UK the leader in research, innovation and scientific discovery.
Segars concluded: “Combining with Nvidia will give us the scale and the resources necessary to address the complexity of next-generation technology that no other path can. This is an exciting prospect and I firmly believe this represents the best future for our company and to ensure that the UK stays at the forefront of the next 30 years of computing.”
Related links and articles:
News articles:
ARM sale to Nvidia agreed at $40 billion
Opinion: Nvidia’s bad deal is not yet done
Qualcomm, others would invest in ARM IPO
Jensen Huang’s defence of the Nvidia-ARM deal
UK intervenes in Nvidia-ARM deal on national security grounds
ARM’s China struggle threatens Nvidia deal
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