This year, the largest IPO in the US stock market is coming with the help of AI. Arm, a subsidiary of SoftBank, has applied for listing.

Riding the wave of artificial intelligence (AI) boom, Arm Holdings, the global chip architecture design giant under SoftBank, has officially filed for an IPO.

On Monday, August 21, Arm submitted its application to the U.S. Securities and Exchange Commission (SEC) to list on the NASDAQ under the stock symbol ARM. The filing disclosed that SoftBank has enlisted 28 underwriters for the offering, with Barclays, Goldman Sachs, JPMorgan, and Mizuho Financial Group leading the pack.

The filing did not disclose information regarding Arm's valuation, pricing, or fundraising size for the IPO. Previous reports suggested that Arm aims to raise $10 billion through the IPO, while other reports mentioned a fundraising range of $8 billion to $10 billion. There were also reports that SoftBank plans to sell approximately 10% of its Arm shares in this IPO.

If the news of raising $10 billion is true, Arm could potentially create the largest U.S. IPO since Rivian raised $13.7 billion in October 2021, and become the third-largest technology IPO after Alibaba's listing in 2014 and Facebook's listing in 2012.

Earlier this month, media reported that Arm plans to start its roadshow in the first week of September and determine the IPO's offering price in the second week. Arm's valuation is estimated to be between $60 billion and $70 billion. Last week, it was reported that SoftBank recently bought 25% of Arm shares from its Vision Fund, valuing Arm slightly above $64 billion.

SoftBank acquired Arm for approximately $32 billion in 2016 and sold 25% of Arm's shares to the Vision Fund for $8 billion the following year. SoftBank's purchase of Arm shares from the Vision Fund this year is actually a buyback from the Middle Eastern investors who are the "backers" of the Vision Fund.

According to the documents disclosed on Monday, SoftBank has spent $16.1 billion to acquire the 25% stake in Arm held by the Vision Fund. After Arm goes public, SoftBank will still be the company's controlling shareholder.

Last week, Wall Street CN mentioned that media reports revealed that the draft documents submitted by Arm to regulatory agencies showed that the company's annual revenue for the previous fiscal year ending March 31, 2023, decreased by approximately 1% to $2.68 billion. The Arm filing on Monday also confirmed this decline in annual revenue.

The draft documents from last week also showed that for the previous fiscal quarter ending June 30, Arm's revenue decreased by 2.5% to $675 million, according to U.S. accounting standards. This is a smaller decline compared to the decrease reported by SoftBank earlier this month, where they stated that Arm's sales for the previous quarter decreased by approximately 11% to $641 million, based on international financial reporting standards. Arm's declining revenue in the previous fiscal year reflects the sluggishness of its most important business area, the smartphone market. Currently, the global chip industry is still struggling with sales decline due to excess inventory. One of Arm's largest partners, Qualcomm, announced earlier this month that its second-quarter revenue exceeded expectations, but still dropped by 23%. The guidance for this quarter continues to accelerate the decline, indicating that the demand in the smartphone market remains weak.

However, there are signs of a rebound for Arm in this fiscal year. SoftBank announced in May that, according to international accounting standards, Arm's revenue grew by 5.7% in the latest fiscal year.

Some analysts pointed out that since Rene Haas took over as CEO last year, Arm has been working hard to expand into markets beyond smartphones. The current focus is on data center chips that can be used for cloud computing and AI applications, which are the highest-priced and most profitable chips in the industry.