Amazon seeks UK chipmaker to power data centers

SoftBank hopes to raise a record $10 billion when it lists Arm in New York next month. Credit: KAZUHIRO NOGI/AFP

Amazon is considering becoming a major investor in Arm as it looks to the British chipmaker's technology to power its data centers.

The online retail giant is one of several tech companies , who are in talks to buy shares in Arm, which is owned by Japanese investor SoftBank, when it is listed in New York for $60bn (£47bn) next month.

Chip giants Intel and Nvidia also discussed the possibility of investing in the placement as a so-called anchor investor, a business that buys a significant number of shares as part of the transaction.

It's clear. that Nvidia, which was close to buying Arm last year, is expected to invest in the upcoming deal, while Amazon and Microsoft, both clients of Arm, are in talks to buy shares.

Industry Sources reported that SoftBank contacted a number of clients to assess their interest in investing. Reuters first reported Amazon's interest, while customers including Apple, Samsung and parent company Alphabet have reportedly reached out to all customers.

SoftBank, which bought the former blue chip in 2016, is hoping the microchip developer will get an offer. will raise up to $10 billion, a record amount for a UK company, when Arm goes public in September.

Amazon's investment will highlight the importance of semiconductor technology to the online retailer, whose fast-growing Amazon Web Services Internet Infrastructure division has proved highly profitable.< /p> 1904 Fall of chip production in the west

The company has relied heavily on Arm-rivaling Intel technology for its data centers, which support the online presence of tens of thousands of businesses, but it also uses custom-made microchips designed with Arm technologies.

Michael Daimelov, a former Arm employee and investor in Bloc Ventures, said that Amazon is «the largest computer wholesaler and wholesaler on the planet, mostly powered by Intel.»

He said his data centers are currently «mostly based on Intel…so if they go 50:50 Arm and Intel, then Arm wins.» Arm makes more money» while «Arm wins by having Amazon as a key customer.»

SoftBank is trying to generate interest in Arm's stock, which will support a valuation of up to $60 billion, returning profits to the investor after , as it acquired Arm for $32 billion nine years ago.

However, Arm said Tuesday that its sales and profits outpaced the public listing amid a slowdown in the microchip sector. The post-pandemic oversupply led to a drop in demand for new semiconductors, hitting their sales.

Sales in dollar terms fell 10.8% to $619 million in the three months ended June, while as they fell in red made a profit over the same period last year. Global shipments of semiconductors, including Arm technology, fell 6.4% quarter-on-quarter.

Amazon and Arm declined to comment. All other parties did not respond to requests for comment.