Arm is gearing up for an initial public offering (IPO) at a time when investors are showing significant interest in semiconductor and artificial intelligence companies. Arm aims to raise nearly $5 billion through its IPO, which could give it a valuation exceeding $50 billion.

Demand is high, with Reuters reporting that the company may set its share price at or even above the top end of its indicated range.

Part of this demand could be attributed to Softbank, Arm’s owner, focusing on the British chip designer as a player in the artificial intelligence arena.

Arm is poised to be a “key enabler” in the shift towards artificial intelligence computing, as stated in its IPO prospectus.

However, Arm has a different nature than Nvidia and is unlikely to experience the benefits of the AI boom anytime soon, according to analysts cited by CNBC. The future of Arm in the AI space is likely not rooted in massive chips used for training large-scale data models.

Instead, it’s expected to become a major player in the “edge” AI field. This term refers to performing AI processes on devices like smartphones rather than in the cloud, as is the case with ChatGPT.

To achieve this, devices will need low-power chips capable of handling high-performance AI applications. Arm designs the architecture for these chips.

Source: CNBC.com