Arm Holdings

Full briefing

Arm Holdings plc (NASDAQ: ARM) is headquartered in Cambridge, United Kingdom, and was founded in 1990 as Advanced RISC Machines, a joint venture between Acorn Computers, Apple Computer, and VLSI Technology. It was acquired by SoftBank Group in 2016 for $32 billion and re-listed on NASDAQ in September 2023 at a valuation exceeding $60 billion — the largest semiconductor IPO in history. Arm's business model is pure IP licensing. It does not fabricate chips. Instead, it licenses two types of products: (1) Architecture licenses — allowing customers like Apple and Qualcomm to design their own custom CPU cores implementing the Arm Instruction Set Architecture (ISA); and (2) Processor licenses — pre-designed CPU/NPU cores (Cortex-A, Cortex-X, Neoverse N/V series) that licensees can integrate into their SoCs without designing from scratch. The Arm ISA dominates mobile computing with approximately 99% market share in smartphone application processors. In the cloud, Arm's Neoverse cores have gained ground rapidly: AWS Graviton, Microsoft Cobalt, Google Axion, and Alibaba Yitian are all Arm-based server chips. NVIDIA's Grace CPU (used in the Grace Blackwell GB200 AI superchip) is built on Arm Neoverse V2 cores. Arm's chokepoint status is amplified by its ownership structure. SoftBank owns approximately 90% of the post-IPO float. SoftBank is a Japanese conglomerate with significant Chinese investments, creating a complex geopolitical overlay. Nvidia's 2020–2022 attempt to acquire Arm was blocked by regulators in the UK, US, EU, and China — reflecting global consensus that concentrated ownership of this IP would be unacceptable. The company licenses to virtually all major semiconductor companies, including in China. If Arm were required — through US export controls, UK government direction, or SoftBank pressure — to terminate licenses for Chinese chip designers, the impact on Huawei/HiSilicon, Alibaba (T-Head), Baidu, and China's domestic AI chip ecosystem would be severe.