Arm IPO to put SoftBank's AI hard sell to the test

economictimes.indiatimes.com:

SoftBank Group-owned chip designer Arm files for a Nasdaq IPO on Monday, investors are set to hone in on a key question — will the company have «exponential growth» due to the boom in artificial intelligence as CEO Masayoshi Son claims? Since acquiring the chip designer in 2016, Son has positioned Arm as the tech investment conglomerate's crown jewel asset, and in recent months has enthusiastically talked up the role it could play in AI. Arm «is at the centre of a group of AI-related companies to generate synergies» and «85% of SoftBank Group assets are AI-related companies overseas,» he told investors in June. The billionaire also said he has spent months creating hundreds of inventions with AI-powered ChatGPT that he believes can be realised through Arm.

But Son has been short on details. Investors are hoping that the filing, which sources have said is due later in the day, will yield further clues about SoftBank's AI strategy and whether Arm is worth as much as or perhaps more than a pre-IPO valuation of $64 billion. That's the figure SoftBank valued Arm at with the purchase of a 25% holding — the only part it did not directly own — from its Vision Fund unit, sources said on Friday.

Son has been known to over-tout Arm's prospects before. When SoftBank acquired the company in 2016, he said the Internet of Things (IoT) would be the «greatest paradigm shift in the history of humankind,» and Arm-designed chips would power every object newly connected to the internet. The shift has yet to materialise and IoT makes up a fraction of Arm's revenues.