AMD Unveils Instinct MI400: is it time for AMD to challenge NVIDIA dominance?

AMD & NVIDIA chip go head-to-head

AMD has officially lifted the curtain on its next-generation AI chip, the Instinct MI400, marking a significant escalation in the battle for data centre dominance.

Set to launch in 2026, the MI400 is designed to power hyperscale AI workloads with unprecedented efficiency and performance.

Sam Altman and OpenAI have played a surprisingly hands-on role in AMD’s development of the Instinct MI400 series.

Altman appeared on stage with AMD CEO Lisa Su at the company’s ‘Advancing AI’ event, where he revealed that OpenAI had provided direct feedback during the chip’s design process.

Altman described his initial reaction to the MI400 specs as ‘totally crazy’ but expressed excitement at how close AMD has come to delivering on its ambitious goals.

He praised the MI400’s architecture – particularly its memory design – as being well-suited for both inference and training tasks.

OpenAI has already been using AMD’s MI300X chips for some workloads and is expected to adopt the MI400 series when it launches in 2026.

This collaboration is part of a broader trend: OpenAI, traditionally reliant on Nvidia GPUs via Microsoft Azure, is now diversifying its compute stack.

AMD’s open standards and cost-effective performance are clearly appealing, especially as OpenAI also explores its own chip development efforts with Broadcom.

AMD’s one-year chart snap-shot

One-year AMD chart snap-shot

So, while OpenAI isn’t ditching Nvidia entirely, its involvement with AMD signals a strategic shift—and a vote of confidence in AMD’s growing role in the AI hardware ecosystem.

At the heart of AMD’s strategy is the Helios rack-scale system, a unified architecture that allows thousands of MI400 chips to function as a single, massive compute engine.

This approach is tailored for the growing demands of large language models and generative AI, where inference speed and energy efficiency are paramount.

AMD technical power

The MI400 boasts a staggering 432GB of next-generation HBM4 memory and a bandwidth of 19.6TB/sec—more than double that of its predecessor.

With up to four Accelerated Compute Dies (XCDs) and enhanced interconnects, the chip delivers 40 PFLOPs of FP4 performance, positioning it as a formidable rival to Nvidia’s Rubin R100 GPU.

AMD’s open-source networking technology, UALink, replaces Nvidia’s proprietary NVLink, reinforcing the company’s commitment to open standards. This, combined with aggressive pricing and lower power consumption, gives AMD a compelling value proposition.

The company claims its chips can deliver 40% more AI tokens per dollar than Nvidia’s offerings.

Big tech follows AMD

OpenAI, Meta, Microsoft, and Oracle are among the major players already integrating AMD’s Instinct chips into their infrastructure. OpenAI CEO Sam Altman, speaking at the launch event reportedly praised the MI400’s capabilities, calling it ‘an amazing thing‘.

With the AI chip market projected to exceed $500 billion by 2028, AMD’s MI400 is more than just a product—it’s a statement of intent. As the race for AI supremacy intensifies, AMD is betting big on performance, openness, and affordability to carve out a larger share of the future.

It certainly looks like AMD is positioning the Instinct MI400 as a serious contender in the AI accelerator space – and Nvidia will be watching closely.

The MI400 doesn’t just aim to catch up; it’s designed to challenge Nvidia head-on with bold architectural shifts and aggressive performance-per-dollar metrics.

Nvidia has long held the upper hand with its CUDA software ecosystem and dominant market share, especially with the popularity of its H100 and the upcoming Rubin GPU. But AMD is playing the long game.

Nvidia 0ne-year chart snapshot

Nvidia 0ne-year chart snapshot

By offering open standards like UALink and boasting impressive specs like 432GB of HBM4 memory and 40 PFLOPs of FP4 performance, the MI400 is pushing into territory that was once Nvidia’s alone.

Whether it truly rivals Nvidia will depend on a few key factors: industry adoption, software compatibility, real-world performance under AI workloads, and AMD’s ability to scale production and support.

But with major players like OpenAI, Microsoft, and Meta already lining up to adopt the MI400.

Is now a good time to invest in AMD?

Apple, Amazon and Intel all post positive results 31st October 2024

Apple

Apple’s fourth-quarter results surpassed Wall Street forecasts for revenue and earnings per share. However, net income declined due to a one-time charge related to a tax settlement in Europe.

iPhone sales and overall sales both rose by 6%.

Apple one year stock chart

Amazon

Amazon’s shares soared in after-hours trading following the announcement of earnings and revenue that exceeded expectations. The firm’s cloud services and advertising divisions demonstrated significant expansion.

Amazon one year stock chart

Intel

Intel has reported earnings that surpassed expectations and provided improved guidance. The company is currently undergoing a significant restructuring initiative.

Intel one year stock chart

However, Intel has now lost over half its market value.

Qualcomm intensifies competition with Intel and AMD and others as the company introduces its newest AI PC chip

New AI chip from Qualcomm

Qualcomm has introduced the Snapdragon X Plus 8-core processor, intensifying its venture into the AI PC market and challenging competitors like Intel and AMD

The U.S. semiconductor powerhouse announced that the Snapdragon X Plus 8-core targets PCs priced from $700, aiming to broaden its chip reach to additional devices.

Moreover, Qualcomm has enjoyed backing from Microsoft, which is incorporating Snapdragon processors in its Copilot+ PCs.

Qualcomm says the company is also working on mixed reality smart glasses with Samsung and Google.

Intel sells stake in UK chip designer Arm

Circuit board microchip

Intel has divested its 1.18 million share stake in the British chip company Arm Holdings, according to a regulatory filing.

Intel is undergoing significant restructuring and cost-cutting to address competitive challenges in the semiconductor industry.

The recent transaction, disclosed on Tuesday 13th August 2024, is believed to have earned Intel approximately $147 million, based on Arm’s average share price between April and June 2024.

This move away from Arm occurs during a challenging financial phase for Intel, as it embarks on what CEO Pat Gelsinger reportedly describes as “the most extensive restructuring of Intel since the memory microprocessor transition four decades ago.”

In early August, Intel announced a cost-reduction plan designed to save $10 billion. This includes the layoff of about 15,000 employees, the elimination of the fiscal fourth-quarter dividend, and a reduction in capital expenditures.

At the same time, Intel disclosed quarterly figures that fell short of expectations and provided conservative guidance for the upcoming quarter.

This announcement precipitated the steepest single-day decline in Intel’s stock value in half a century, plummeting 26%.

Intel one year chart as of 15th August 2024

Intel one year chart as of 15th August 2024

Amazon, Intel, Meta, Nintendo, Apple, Snap, Qualcomm and others report – here’s a brief round-up

Reports summary 31st July 2024 -1st August 2024

Amazon offers weak guidance citing Olympics and the Trump assassination attempt as cause (consumers are distracted). However, Amazon’s cloud unit reports 19% revenue growth, topping estimates and a 20% increase in business in Q2. Amazon stocks pull back after guidance update.

Intel endures a 22% share plunge dragging down other global microchip stocks from TSMC, ASML to Samsung. Company to cut 15% of workforce, reports quarterly guidance miss.

Meta shares climb 6% on positive earnings data and good revenue forecast. Zuckerberg enthused over AI and how it’s helping create profits suggesting ‘Meta’s advertising growth is proof that BIG AI spending is already paying off.’ However, Meta’s Reality Labs posts $4.5 billion loss in second quarter.

Nintendo profit falls 55% as sales of its ageing Switch console plunge. Nintendo revenue and profit plunged in Q1 as sales of its ageing Switch console decline. Nintendo sold 2.1 million units of its Switch consoles, down 46% on the year. Investors are seeking news surrounding a successor to the Nintendo Switch console.

Apple sales climbed 5%, topping estimates as iPad and services revenue lift despite ongoing issues with iPhone sales slipping in China. Apple is spending more on AI but remains way behind its peers.

Snap shares plunge more than 20% on weak guidance.

Qualcomm beats estimates as phone microchip sales up 12%.

Samsung Q2 revenue and profit comes in above estimates amid strong AI demand.

AMD jumps 5% as global microchip stocks rally. Data centre sales doubled.

Is this German chipmaker about to gain more traction in the AI race

Ai microchip

While Nvidia continues to dominate the AI chip market headlines, Infineon, a German semiconductor company, is also making waves.

Infineon is capitalizing on the AI surge, aiming to generate billions in revenue through the sale of premium chips.

As AI applications proliferate, encompassing data centre servers and integrated chipsets for PCs and mobile devices, the demand for AI chips is skyrocketing. This trend has only one direction, and that is up.

Infineon is certainly one to watch – it may just become the next major player in the industry.

Others to watch: ARM Holdings, AMD and Intel

Nvidia $3 trillion market cap propels S&P 500 and Nasdaq to new all-time highs

Nvidia at $3 trillion market cap

The S&P 500 reached a new high as Nvidia surpassed the $3 trillion mark for the first time, and the anticipation of an interest rate cut grew due to softer-than-expected job data.

S&P 500 all-time high as of 5th June 2024

S&P 500 all-time high as of 5th June 2024

Similarly, the Nasdaq 100 and Nasdaq Composite achieved new record highs

Nasdaq 100 as of 5th June 2024
Nasdaq Comp as of 5th June 2024

AI boom catapults Nvidia passed Apple’s market cap’ valuation

Artificial intelligence (AI) chipmaker Nvidia passed Apple’s market cap’ to become the world’s second most valuable company after Microsoft.

Nvidia’s shares have surged 24% following its impressive earnings report in May, in contrast to Apple’s shares, which have increased by only 5% this year amid a slowdown in sales growth in recent months.

Nvidia one year share price as of 5th June 2024

Nvidia one year share price as of 5th June 2024

Nvidia Market Cap at $3.01 trillion as of 5th June 2024

Nvidia £3.01 trillion market cap’

Intel unveils new AI chips as it seeks to reclaim market share

Ai microchip

Intel announced its new Xeon 6 processors at the Computex tech conference in Taiwan on Tuesday 4th June 2024.

This announcement coincides with the recent launches of new artificial intelligence chips by rivals Nvidia and AMD on Sunday and Monday 2nd and 3rd June 2024 – as they compete for dominance in the rapidly growing industry.

Intel is making efforts to catch up with Nvidia and AMD, having been relatively absent from the AI surge that led tech giants such as Meta, Microsoft, and Google to purchase a significant number of Nvidia chips.

This comes half a year after Intel’s release of its 5th Gen Intel Xeon processors for data centre workloads and a couple of months following the announcement of the Gaudi 3 processor for AI model training and deployment.

Intel also disclosed that the Gaudi 2 and Gaudi 3 AI accelerators are priced lower than those of its competitors.

Furthermore, Intel shared architectural details of its forthcoming Lunar Lake processors, aimed at expanding the AI PC category. These processors, slated for release in the third quarter, are set to rival Nvidia’s and AMD’s offerings tailored for AI PCs.

While Nvidia and AMD focus on chip design, Intel stands out by both designing and manufacturing its chips. Nevertheless, Intel’s foundry business has faced challenges, with its operating loss widening to $7 billion in 2023 compared to the previous year.

AMD announces new chips amid intensifying AI competition

Artificial Intelligence chips

AMD announced new artificial intelligence chips on Monday 3rd June 2024, aiming to position itself as a leader in the market alongside competitors such as Nvidia and Intel.

“AI is our number one priority and we’re at the beginning of an incredibly exciting time for the industry as AI transforms virtually every business, improves our quality of life, and reshapes every part of the computing market,” chair and CEO Lisa Su reportedly commented during the Computex tech conference.

The company unveiled the Ryzen AI 300 series for next-generation AI laptops. The line is anticipated to compete directly with Intel’s upcoming Lunar Lake and Qualcomm’s Snapdragon X. And in partnership with Microsoft, these new AI chips will power laptops equipped with the tech giant’s AI chatbot Copilot.

AMD has unveiled the new Ryzen 9000 series for desktops, inferred as ‘the world’s fastest consumer PC processors’ for gaming and content creation.

The series is due for release in July 2024, following closely on the heels of AMD’s April announcement of new processors capable of running AI workloads – the Ryzen Pro 8040 for laptops and the Ryzen Pro 8000 for desktops.

AMD one year chart

AMD one year chart

Nvidia announces new AI chips

AI

Nvidia has revealed its latest generation of AI chips, coming just months after the release of its preceding model.

This rapid succession underscores the intense competition within the AI chip market and Nvidia’s relentless effort to maintain its leading position.

CEO Jensen Huang has now committed to unveiling new AI chip technology annually, accelerating the company’s prior biannual pace. The latest AI chip architecture, named ‘Rubin,’ is set to follow the ‘Blackwell’ model announced in March 2024, which is currently in production and anticipated to be delivered to customers the latter part of 2024.

Huang’s unveiling of the Rubin has seemingly hastened Nvidia’s already rapid AI chip development.

Nvidia has committed to launching new AI chip designs annually, a cadence Huang reportedly referred to as a ‘one-year rhythm‘ during his Sunday 2nd June 2024 announcement. Previously, the company was committed to updating its chips every two years. But such is the speed and fierce competition of AI development, that original decision has become quickly out-dated.

The swift transition from Blackwell to Rubin, taking less than three months, highlights the intense competition in the AI chip market and Nvidia’s race to maintain its leading position.

AMD and Intel are two major competitors playing catch-up in the AI race.

Nvidia one year share chart

Nvidia one year share chart

With a 20,000% increase over the past decade – has Nvidia’s stock peaked?

NVIDIA Corporation (NVDA) has experienced remarkable growth over the past decade.

Historical stock price trends

As of 10th May 2024, NVIDIA’s closing stock price stood at: $898.78

As of 10th May 2024, NVIDIA’s closing stock price stood at: $898.78

NVIDIA’s stock reached an all-time high of $950.02 on 25th March 2024. The 52-week high stands at $974.00, which is 9.7% higher than the current share price. Conversely, the 52-week low was $280.46, which is considerably below the current price.

Annual percentage changes

In 2024, the average stock price reached $763.29, marking a year-to-date rise of 79.30%.

In 2023, NVIDIA’s stock price experienced a remarkable surge of 239.02%.

Conversely, in 2022, the stock price witnessed a decline of 50.27%.

Throughout the past decade, the stock has undergone considerable volatility, exhibiting both notable gains and significant losses.

Focus

NVIDIA began as a pioneer in PC graphics and has since expanded its focus to artificial intelligence (AI) solutions. Its GPUs (graphics processing units) are pivotal in AI, high-performance computing (HPC), gaming, and virtual reality (VR) platforms.

The company’s parallel processing capabilities, powered by thousands of computing cores, are vital for executing deep learning algorithms. Additionally, NVIDIA is active in emerging markets such as robotics and autonomous vehicles.

Market position

NVIDIA holds a dominant position in the Data Centre, professional visualization, and gaming markets. Its success is bolstered by strategic partnerships with leading cloud service providers and server vendors.

Financial performance

NVIDIA’s revenue and profit have seen substantial growth over time. Its emphasis on AI and new technologies suggests a strong potential for further expansion. In summary, despite NVIDIA’s stock achieving impressive gains, it is still influenced by market trends and technological changes.

Its peak status hinges on multiple elements such as industry movements, competitive landscape, and upcoming innovations. Investors are advised to meticulously assess these factors when determining the stock’s future prospects.

Considering a long-term investment yet expecting a downturn, it might be prudent to realise some profits now, given the enormous 20,000% surge in stock value.

Take some profit and buy again after a pull-back.

Arm reportedly to launch AI chips in 2025 as Softbank plan AI data centres

AI

Arm, with a 90% holding by SoftBank, is reportedly set to establish an AI chip unit with the goal of developing a prototype by spring 2025.

This initiative is aimed at catching up with the booming AI market, currently dominated by Nvidia.

Arm, alongside competitors such as AMD, Intel, and Qualcomm, is accelerating efforts to gain position in the AI sector.

SoftBank is negotiating with contract manufacturers, including Taiwan’s TSMC, to produce the AI chips. Mass production is expected to commence in autumn 2025.

Arm’s shares have surged by nearly 45% this year, bringing its market capitalization to over $113 billion.

The chip designer based in the U.K., plans to create an AI chip unit to develop a prototype by spring 2025.

Discussions are reportedly ongoing with contract manufacturers like Taiwan’s TSMC for the production of the AI chips. It was reported that production is anticipated to start in fall 2025.

Arm is responsible for designing the core architecture for these chips. The company licences its designs to companies including Qualcomm and Nvidia and earning royalty fees from each sale. The company asserts that 99% of high-end smartphones utilize Arm technology.

Ambition

Established by Japanese billionaire Masayoshi Son, SoftBank is heavily investing in AI. The company has new plans to allocate $960 million by the following year to enhance its generative AI computing capabilities. In June 2023, Son expressed SoftBank’s ambition to occupy a leading role in the AI revolution.

Reportedly, SoftBank aims to establish AI data centres equipped with proprietary chips throughout the U.S., Europe, Asia, and the Middle East by 2026.

For the fiscal year concluding in March 2024, SoftBank recorded a 7.24 billion Japanese Yen ($4.6 billion) profit in its Vision Fund.

This was the first profitable year for the principal tech investment division since 2021.

Arm Holdings share price drops

AI

UK chip designer Arm’s shares fell on Thursday 9th May 2024, subdued by revenue forecasts despite a strong sales quarter fueled by demand for AI applications.

Arm announced a 47% increase in fiscal Q4 revenue to $928 million on Wednesday.

This surge was propelled by its licensing business, which saw a 60% increase to $414 million for the quarter, attributed to several high-value licencing deals for AI chips.

Additionally, Arm’s royalty revenues rose 37% to $514 million year-over-year, thanks to the growing adoption of its new Armv9-based chips, which offer higher margins.

However, Arm’s revenue projection for 2025, estimated between $3.8 billion and $4.1 billion, did not meet investor expectations, with analysts anticipating $3.99 billion for the year.

What is Arm?

Contrary to chipmakers like Nvidia, which manufacture and market their own products, Arm creates the ‘architectures’ that form the foundation of chips.

These designs are then licenced to various chip manufacturers, including Qualcomm and Nvidia, with Arm earning royalties on each unit sold.

Originally founded in Cambridge, England, in 1990, Arm was an independent company listed in London until 2016, when it was acquired by Japanese tech investor SoftBank for $32 billion.

In September 2023, SoftBank listed Arm on the Nasdaq. Since its initial public offering, Arm’s share value has more than doubled, driven by the explosive demand for chips that power advanced generative AI applications, such as ChatGPT.

But this recent revenue forecast had a negative effect on its share price

Arm Holdings one year chart to 9th May 2024

The recent revenue forecast had a negative effect on its share price

Intel shares fall after company provides weak forecast

Microchip stock chart

Intel shares fall after company provides weak forecast for earnings, but disappoints with sales.

The stock fell 8% in extended trading.

Monthly stock price chart for Intel Corp. March to April 2024

Monthly stock price chart for Intel Corp. March to April 2024

Intel actual versus consensus expectations for the quarter ended in March 2024:

Earnings per share: 18 cents vs. 14 cents expected

Revenue: $12.72 billion vs. $12.78 billion expected

For the second quarter, Intel anticipates earnings of 10 cents per share with a projected revenue of $13 billion. This projection is in contrast to analysts’ expectations, which predict earnings of 25 cents per share on sales amounting to $13.57 billion.

In the first quarter, Intel disclosed a net loss of $400 million, equivalent to 9 cents per share, as opposed to the previous year’s net loss of $2.8 billion, 66 cents per share.

Revenue was $12.7 billion versus $11.7 billion a year ago, a 9% year-over-year increase.

Nvidia enters correction territory as stock falls from all-time high

AI

Nvidia, manufacturer of one of the most advanced graphics processing units (GPUs), has significantly benefited from the artificial intelligence (AI) surge due to the high demand for its microchips.

The company’s shares have fallen 10% from their recent all-time high, which was over $950. On Tuesday, 9th April 2024, the stock closed at $853.54, but it saw a slight recovery on Wednesday 10th April 2024, to $870.39.

Nvidia Corporation share price off recent all time high

Nvidia Corporation share price off recent all time high

On Tuesday, 9th April 2024, Intel, a competitor in the chipmaking industry, introduced a new AI chip named Gaudi 3. This chip is designed to drive large language models and stands as a contender against Nvidia’s most sophisticated chips.

U.S. inflation data coming in higher than expected along with a climb in treasuries has led to doubts of a Fed rate cut anytime soon.

These concerns combined together, pushed Nvidia and some other tech stocks lower.

The Nasdaq Composite drifted lower on the day

The Nasdaq Composite drifted lower

Intel shares fall after $7 billion operating loss revealed in foundry business

Microchip manufacture

Intel’s stock dropped by 4% during extended trading on Tuesday 2nd April 2024, following the disclosure of long-anticipated financial details for its semiconductor manufacturing division, often referred to as the foundry business, in a filing with the SEC.

The company reportedly disclosed that its foundry business incurred an operating loss of $7 billion in 2023, against sales of $18.9 billion. This represents a greater loss compared to the $5.2 billion operating loss reported by Intel for its foundry business in 2022, which had sales of $27.5 billion.

This is the first time that Intel has disclosed revenue totals for its foundry business separately. Historically, Intel has both designed its own chips as well as its own manufacturing and reported microchip sales to investors.

Other American semiconductor companies such as Nvidia and AMD design their microchips but send them off to Asian factories such as Taiwan’s TSMC for manufacturing.

AMD enters AI-powered PC race as artificial intelligence demand grows

AI power

U.S. microchip giant Advanced Micro Devices (AMD) is investing in AI PCs to take on the likes of Nvidia and Intel and Arm as the AI race gains momentum.

As the AI market expands so too will AI powered personal computer (PC). These are personal computers embedded with processors specifically designed to perform AI functions such as real-time language translation. Intel has already announced its AI powered chip for the PC.

Tech research firm Canalys in a December report said the boom in generative AI is expected to boost PC sales as consumers are seeking devices with AI features, predicting that 60% of the PCs shipped in 2027 will be AI-capable.

AI tech interest explodes

An explosion of interest in AI was sparked by the launch of ChatGPT in November 2022 as the chatbot went viral for its ability to generate human-like responses to users’ prompts.

Microsoft was quick to adopt the Technolgy and incorporate AI into its Bing search engine. Other companies such as Amazon, Alphabet (Google), Arm, Meta, Tesla and Apple are all heavily involved in AI development too.

Intel unveils new AI chip

AI micro chip

Intel’s new chip will go head-to-head with Nvidia and AMD

Intel unveiled new computer microchips on Thursday 14th December 2023, including Gaudi3, a chip for generative AI software.

Intel also announced Core Ultra chips, designed for Windows laptops and PCs, and new fifth-generation Xeon server chips. Intel’s server and PC processors include specialized AI parts called NPUs that can be used to run AI programs faster.

AI race

AI models, like OpenAI’s ChatGPT, run on Nvidia GPUs in the cloud. It’s one reason Nvidia stock has been up nearly 230% year to date while Intel shares have risen 68%. And it’s why companies like AMD and, now Intel, have announced chips that they hope will attract AI companies away from Nvidia’s dominant position in the market.

Gaudi3 will compete with Nvidia’s H100, the main choice among companies that build huge factories of the chips to power AI applications, and AMD’s forthcoming MI300X, when it starts shipping to customers in 2024.

CEO Gelsinger

‘We’ve been seeing the excitement with generative AI, the star of the show for 2023,’ Intel CEO Pat Gelsinger reportedly said at a launch event in New York where he announced Gaudi3 along other chips focused on AI applications.

Intel upping the anti with its Gaudi AI chip. The AI PC to become the new AI start of 2024 and beyond!

We think the AI PC will be the star of the show for the upcoming year,’ Gelsinger added. And that’s where Intel’s new Core Ultra processors, also announced on Thursday, will come into play.

Let the battle commence.

Nvidia stock falls after restrictions placed on AI chip exports from U.S.

AI microchip

The U.S. reportedly announced new restrictions on exports of advanced chips to China, including two made-for-China chips from Nvidia.

U.S. chip stocks fell as the curbs also hit Advanced Micro Devices and Intel.

Loopholes

The curbs are aimed at closing loopholes that became apparent after the U.S. announced export curbs on microchips in October 2022. The restrictions are designed to prevent China’s military from importing advanced semiconductors or equipment.

Nvidia has said in a filing that the new export restrictions will block sales of two high-end artificial intelligence chips it created for the Chinese market – A800 and H800. It said that one of its gaming chips will also be blocked.

Nvidia Corp one month chart – closed at 439.38 17th October 2023

Although the curbs also affect other chip makers, analysts believe Nvidia will be hit the hardest because China accounts for up to 25% of its revenues from data centre chip sales. Nvidia’s shares, which are considered a star stock, fell by as much as 4.7% in the wake of the announcement.

Semiconductor Industry Association

The Semiconductor Industry Association, which represents 99% of the U.S. semiconductor industry by revenue, said in a statement that the new measures are ‘overly broad‘ and ‘risk harming the U.S. semiconductor structure without advancing national security as they encourage overseas customers to source elsewhere’.

China reacts

A spokesperson for the Chinese embassy also said that it ‘firmly opposes‘ the new restrictions, which also target Iran and Russia and go into effect in 30 days.

Nvidia stock falls after restrictions on AI chip exports from U.S. to China

Two months ago, China retaliated by restricting exports of two materials, gallium and germanium, which are key to the semiconductor industry.

China is by far the biggest player in the global supply chain of gallium and germanium. It produces 80% of the world’s gallium and 60% of germanium.

The materials are ‘minor metals‘, meaning that they are not usually found on their own in nature, and are often the by-product of other processes. It’s not only the U.S., Japan and the Netherlands – which is home to key chip equipment maker ASML – have also imposed chip technology export restrictions on China.

Fallout

The constant ‘fall-out’ between the world’s two biggest economies has raised concerns over the rise of so-called ‘resource nationalism‘ – a practice where governments hoard critical materials to exert influence over other countries.

Arm looking for up to $52 billion valuation in U.S. IPO

Arm Holdings

Chip design firm Arm on 5th September 2023 submitted an updated filing for its upcoming initial public offering on the New York Stock Exchange, setting a price range between $47 and $51. Only 9.4% of Arm’s shares will be freely traded on the NYSE.

Arm was previously listed in London and New York, before SoftBank acquired it for $32 billion in 2016.

Chip design firm Arm on Tuesday is looking to acquire as much as $4.87 billion in its upcoming initial public offering on the New York Stock Exchange, according to the new filing.

The deal could value the company at as much as $52 billion

As a British company, Arm qualifies as a foreign private issuer in the U.S. and its shares will count as American depositary shares, or ADS’s. It is reported that the company will list some 95.5 million ADS’s at a price range of between $47 and $51. At the upper end of that range it is estimated that Arm will likely raise up to $4.87 billion. At the lower end, the IPO would fetch $4.49 billion of fresh capital for Arm. It could do even better.

Institutional funds

When the company floats in New York, it will look to enjoy a very deep pool of professional institutional funds. Arm seeks to ramp up its investments in research and development, particularly as it pursues growth in the artificial intelligence (AI) space with some of its newer chips. The company recently released new chips specifically targeted at AI and machine learning use cases.

Arm AI chip
Arm seeks up to $52 billion valuation in U.S. IPO

Upper end

At the upper end of the pricing range, Arm would also touch a total valuation of $52 billion or more. Only 9.4% of Arm’s shares will be freely traded on the New York Stock Exchange, with SoftBank expected to own roughly 90.6% of the company’s outstanding shares after the completion of the IPO.

Arm’s listing is set to be the biggest technology IPO of the year. Investors are hoping that the listing could breathe new life into an IPO market that has been ‘slack’ since 2022.

250 billion chips globally

Arm says its energy-efficient processor designs and software platforms are integrated into more than 250 billion chips globally, into products ranging from sensors and smartphones to supercomputers.

The company estimates it enjoys approximately 48.9% share of the market for semiconductor design. Other players, such as Intel and AMD, have raced to catch up on designing their own chip architectures, but have struggled so far.

U.K. misses out… again

The U.K. government had originally hoped Arm would list on the London Stock Exchange, but the company instead dealt a major blow to Britain’s ambitions to become the leading global tech hub by opting for New York. The U.S. financial center has a deep institutional investor base and analysts who have a close understanding of the technology sector.

BIG interest

Chip design firm Arm said in a Tuesday filing that Apple, Google parent Alphabet, Nvidia and other technology companies are interested in buying up to $735 million in its shares as it seeks to go public on Nasdaq.

The investments might not happen, but the fact that these companies are considering them underlines the importance of Arm, whose designs are used for processors in data center servers, consumer devices and industrial products.

ARM chip
Arm chip – some 250 billion chips globally

Chip makers Intel, Samsung and TSMC are interested in investing alongside the three trillion-dollar technology companies, along with AMD and MediaTek, which make chip designs based on Arm architectures. Cadence Design Systems and Synopsys, which make electronic design automation software for processor development, have also expressed interest, according to a revised prospectus for Arm’s shares sale. This IPO could easily be the biggest of the 2023!

As part of the deal, Arm could wind up with a $52 billion market capitalization and almost $5 billion in new cash.

This is likely to be the biggest IPO of 2023

It is estimated that there will be about 19 billion devices using the Arm processor in the world by the end of 2023.

Arm target

The market share of Arm across different technology markets worldwide, which was 90% for mobile application processors, 34% for embedded computing, and 5% for data center and cloud in 2019. 

Arm has a target of increasing its market share to more than 90%, 50%, and 25% respectively by 2028.