How SoftBank’s Arm Rode the AI Wave to Biggest IPO of 2023

What’s set to be the biggest initial public offering of 2023 came from a company unknown to most consumers, though they use its products. Arm Ltd. designs key parts of the chips powering almost every smartphone on the planet. That’s given the Cambridge, UK-based company enormous strategic importance in the technology industry. The IPO, which valued the company at about $54.5 billion, drew some of its biggest customers as strategic investors including Apple Inc., Nvidia Corp. and Samsung Electronics Co., all keen to uphold the neutrality that’s key to Arm’s success.

Arm designs core semiconductor components and licenses the blueprints, along with the fundamental code governing how software communicates with chips. The arrangement brought in $2.68 billion of revenue in the fiscal year that ended on March 31, making Arm one of Britain’s largest technology companies. Japan’s SoftBank Group Corp. acquired Arm for $32 billion in 2016, delisting it from the London Stock Exchange. SoftBank founder Masayoshi Son has regularly talked up the potential for more growth at Arm, which raised $4.87 billion in the IPO. Softbank sold a stake of about 10% in the form of American depositary shares.