Arm Holdings IPO: Celebrations in Cambridge as CEO Rene Haas says ‘There’s nothing else like us in this industry’
Arm CEO Rene Haas has delivered a confident message about Arm’s future as the chip designer made its eagerly-awaited return to the stock market today - a move celebrated live in Cambridge.
He acknowledged there had been a “long road with lots of twists and turns we never anticipated nor expected” on the way to the IPO in New York, but said Arm is now a “stronger and more resilient company”.
And he spoke of “boundless opportunities” in a world where “computing needs are insatiable”.
Trading began on New York’s Nasdaq at 2.30pm UK time on Thursday, with Cambridge-headquartered chip designer announcing the day before that it had secured a price of $51 (£41) per share, giving an overall valuation of $54.5bn (£43.6bn).
There was high demand from investors for the 95.5 million shares on offer, and the market value was better than the $40bn (£32bn) it would have achieved had the plan to sell to NVIDIA - which ran into regulatory hurdles - gone through last year.
That was below the $64bn (£51bn) valuation placed last month on the company SoftBank, the Japanese conglomerate that has owned Arm since 2016.
But today, with the stock indicated to open at $60, it was expected to hit $64.1billion as it made its Nasdaq debut.
Nvidia, Apple and Samsung are among those to have grabbed shares in the IPO.
Kirsty Gill, chief people officer at Arm, and a member of the executive committee in Cambridge, told the Cambridge Independent: “Today’s been an exciting milestone for us - a real celebration in Cambridge as we go back on to the public markets and I think it really signals how successful the Arm strategy has been, especially under Rene’s leadership. There are great opportunities for the future.
“The atmosphere in Cambridge has been amazing. We’ve had over 3,000 employees come in today. We’ve got a packed atrium and Cambridge was invited to celebrate live with the Nasdaq exchange.
“There was great energy and we were able to share in the bell ringing.
“We are proud of our British heritage, our Cambridge heritage, and we shipped over to the Nasdaq a pub, and so in the Nasdaq studio there was a British pub serving cream teas and fish and chips and it shows how proud we are of where we’ve come from and our British roots.”
Mr Haas was also in celebratory mood.
“Today in New York and Arm sites worldwide, we are celebrating our re-entrance into the public markets and our next phase in building the future of computing,” he said.
“To the Arm employees, partners and the entire ecosystem who have worked together to advance the Arm computing platform over our 33-year history, a heartfelt thank you.
“Together, we have built the world’s largest compute and software ecosystem based on the most pervasive CPU architecture in history. More than 250 billion Arm-based chips have shipped to date, making Arm CPUs the brains of everything. This shared success stems from the Arm DNA, born of designing high-performance, yet power-efficient processors for products that run off batteries.
“These design principles are why Arm-based chips have powered more than 99 per cent of the world’s smartphones for more than a decade. And today, it is why the Arm going public in 2023 looks much different than the one SoftBank took private in 2016, as every end market requires greater power efficiency combined with more performance.”
And Mr Haas spoke about the evolution of the company in recent years as it has focused on more specific platforms.
“In 2017, we pivoted from designing general-purpose CPUs for smartphones and consumer devices, to designing purpose-built CPUs for specific markets,” he said.
“Arm’s growth is no longer solely defined by the smartphone market. We have a much more diversified business with market-specific compute platforms deployed in more mobile devices, cloud infrastructure, automotive and IoT.
“But now our partners need even more from us. Chip manufacturing cycle times are increasing, and the pace at which they need to deliver their products is unrelenting, all while chips get more complex and are being broken up into smaller chips consisting of subsystems that are blocks of IP.
“To reduce design time, these subsystems require a fully verified, tested compute solution that works right out of the box. This is a new growth opportunity for Arm as we’re uniquely positioned to deliver these compute subsystems across our key markets. In fact, last month we announced the first manifestation of this with the launch of our Arm Neoverse compute subsystems.
“However, everything we do to enable our silicon partners to innovate and reach the market faster can only move the needle if we have a thriving software ecosystem. This is the real strength of Arm, the connection between our CPUs and our software ecosystem. There is simply nothing else like it in our industry.
“Our unrivalled software ecosystem has given Arm the broadest software support of any CPU architecture ever invented. This is critical for developers in the age of AI. They can confidently write their code for Arm compute platforms, know it will work on Arm and there will be demand. AI on Arm is literally everywhere.”
Mr Haas suggested Arm would be in a stronger position to invest following its IPO, although there has been disappointment in the UK that it is taking place in New York rather than on the London Stock Exchange, closer to the company’s Cambridge roots.
“As CEO of Arm, it is our opportunity to bring AI to everyone, everywhere and that excites me most. Seventy per cent of the world’s population relies on Arm technology today, putting us in a unique position to advance AI across all devices. And as a public company, Arm is in a stronger position to strengthen our already talented engineering team and invest in more AI opportunities.
“Again, I want to thank our employees and our ecosystem for their contributions to making today possible. I know it has been a long road with lots of twists and turns we never anticipated nor expected. But we came through as a stronger and more resilient company. Arm and its ecosystem have boundless opportunities because everything today is a computer and in the AI era, the world’s computing needs are insatiable. Together, we are building the future of computing. A future built on Arm.
“I cannot wait for the next phase of our history to be written. It’s a great time to be at Arm.”
Following the opening, Brandie E Blackler, a market analyst at Admirals, said: "Given the high anticipation of the Arm IPO, it’s no surprise the company managed to surpass the $47-$51 per share forecast. As Bloomberg and Reuters stated on September 12, the Arm IPO was already over subscribed by six to 10 times, two days before the IPO date. It is worth noting that, many companies’ pre-IPO will price the shares lower to spark higher consumer demand - this could have been the strategy with Arm. It will be interesting to see the performance over the next week and whether or not the Arm share price maintains momentum, however typically and statistically, share prices drop after their IPO debut."
One man who has been through an IPO before with Arm is its co-founder and former COO Jamie Urquhart, who was at the company when it went public the first time, in 1998.
He told the Cambridge Independent: “If I compare now with then, in the early days we saw going public as giving us independence and the difference now is that 90 per cent of Arm is owned by Softbank, and that has implications for the way they do business but Arm is responding very positively, and if you look at the quality of the investors Arm is very well placed, so this is a place where Arm can flourish more.”
Look out for more from our interviews with Kirsty Gill and Jamie Urquhart in the Cambridge Independent, out from Wednesday (September 20).