Were going to begin with this years biggest ipo, arm pricing its offer at 51. Thats the high end of the projected range and valuing the softbankowned chip designer at 54. 5 billion, fully diluted. Arm, whose customers include apple and nvidia, looking to ride this a. I. Wave, listing on the nasdaq today under arm, and david has this exclusive with renee haas and masa son. My understanding is that they could have gone 52. Thats what i have been told by any number of people, but masa said, lets do 51 with the prospect that that will position it better for some sort of positive open, and thats important here, given the importance of arm to the overall ipo market given the size of the offering, the focus on it, and the fact that we are expecting more to follow. If it doesnt perform well, that might leave not a particularly good taste in investors mouths. The hedge funds been pared back, long only. Sovereign funds and stepped up and converted from what was interest to actual buying power. Well see how it pfrerforms, ji. On the fundamentals, its highly valued. When you look at the last 12 months, its about the future. Its interesting you talk about the long only and obviously these anchor tenants. The anchor tenants themselves are not going to be held to, i paid too high for something. I paid a hundred times versus, say, cadence, and you need that, because remember, if you get it 51, you got to be able to sell it at 58. Theres got to be some upside, and david, even at 51, its expensive. Yeah, its not cheap. But it may very well be the way it trades today is much more about supplydemand than it is about underlying fundamentals, which well sort out over time. Well, you when you speak to rene, i dont think i think rene wants a good deal, the ceo. He does not want a high valuation. He wants people to be rewarded, and i think one of the problems, david, is that the very small float might pop big, and we dont want that. Yeah, you know, you want to sort of leave everybody feeling good but leave something on the table. They just said that. Theres got to be some happy medium. Carl, the bad deals are the ones that open up huge and then retail people get picked off these market orders. What are the key examples that you think of when you look at that scenario . Well, i mean, we didnt know well, first, theres facebook, which, who the heck knew what that was going to be . We had uber, where you had people who really wanted out that we didnt know, and we had individuals who wanted in, and it left a bad taste with everybody. You want to grab that . Im going to grab that. David mentions the underlying fundamentals. The other story is the migration from smart phones to datacenter, and then royalty rates. Royalties are tough, because they tend to go down. I was struggling with whether qualcomm shouldnt be the comp, and thats very low value because theres so much thats cell phone. David, you know this thing has really really has to have a lot of nvidialike business in order to be able to get the higher valuation. Without a doubt. A. I. Is the future that theyve discussed in terms of adding that layer of growth that i think is going to justify not just a price of 51 but perhaps growth from here. As the guys said, of course, we have had a chance to sit down and speak with rene haas and masa son, and i want to play it for you and talk about this is very exciting. The opportunities that mr. Haas sees for this company. Again, priced at 51. Wont begin trading, by the way, most likely, for a few hours from now. Im come back. All right. You come back. Okay, thank you. Take a listen. Arm of 2023, returning to the Public Markets, were a very Different Company than we were in 2016, when we were largely associated, as you said, with mobile. And the important thing to think about arm or remember is that we were born from building a device that was going to run off a battery. So, that sensibility about power efficiency is in the dna of our engineers. So, fast forward to 2023, when you look at the diversification of our markets, cloud datacenter, automotive, everything with ev in automotive, these require extremely power efficient processors or cpus, which is what we do. So, whether its datacenter, obviously around sustainability, you want as low power as possible. Back on these cars running off batteries, its a great place for arm to really grow our business, and thats what we did in the years being private between 2016 and now. We diversified our business. Weve got Significant Growth in the cloud datacenter and in automotive, and then with a. I. , a. I. Runs on arm. Its hard to find an a. I. Device today that isnt armbased. Google amazon alexa, for example, that device, which does voice remem voice recognition, et cetera, thats a. I. You might need more cpus to run more complex a. I. So, we see just huge Growth Opportunities there. What is running generative a. I. , though, is more gpu, and its obviously all produced by nvidia. There is a relationship there. Obviously, you once worked for the company as well. But investors aye spoken to would like to see a lot deeper relationship. Is it your expectation that youre going to sell more to nvidia . Theyre not that large a customer. Nvidia today is doing obviously a lot around a. I. , generative a. I. And training. Their latest product that they announced, the gracehopper super chip, which is their accelerated gpu for a. I. Training, now uses 72 arm cpus as the core cpu in that. Remember, no type of accelerated training for a. I. Can run without a cpu, so now the combination of the arm cpus with nvidia gpus, we think, will be even more Growth Opportunity for us going forward. When investors looked at your s1, for example, or your recent numbers, they didnt see a great deal of growth year over year, and yet youre pointing to much more Significant Growth next year over this year and even after that. Why . The year on year growth was not that great, as you said, but if you look backwards for the last three years as weve pivoted our strategy, were about 15 year over year growth going forward, excuse me, for the last three years, but going forward, again, when you look at these mega trends of efficiency, software, complex a. I. , all having to run off batteries or lowpower devices, this is a huge growth for us. And again, david, grace hopper is a great example of the kind of devices that can only be built on arm. Masa, it wasnt that many years ago that you were selling this company to nvidia. Or at least had plans to sell this company to nvidia. That obviously did not happen. The price tag then was 40 billion. A lot of it was made up of nvidia stock. What has changed between then and now . We did not want to really sell. It was the covid that made me really go into the protective mode. So, i had to go protective mode, and i had to choose the more conservative, careful operation of softbank. So, we were selling to nvidia, but the deal was actually onethird cash, twothirds was exchange of nvidia shares, a combined company of nvidia and arm. I believed in the future of nvidia back then, and it was right, and i believed in the combinations of the power of the two companies would be enormous. I believed in the future of a. I. , and its really now getting proved. And this is the beginning of big a. I. Time, and arm is going to have a big role in that. Were going to share a lot more from that interview. Obviously, including masas belief in a. I. And talk about some of the missteps that have taken place as well. You know, jim, as you know, if that nvidia deal had gone through, they would have benefitted enormously, given the twothirds that would have been the stock. Oh. That said, he bought the stock, if you guys remember, back in 17 and then sold it not that long after. Again, a real opportunity. I would point out one other thing, which is i believe when they bought arm in 2016 for 32 billion, they could have bought all of nvidia for 27 billion. Well, that was the market cap of nvidia at that time. So, when it comes to a. I. And masa and i discussed this, and well share it with everybody. He was talking about it ad nauseam four years ago, five years ago, and yet they havent benefitted from it as much as you might have thought given he certainly had the right viewpoint. It just took a while to get there. Do you think, david, one of the reasons why he may not have benefitted is that theyre so dominant in cell phone that you end up saying, you know what . Theyre doing okay in a. I. , but theyre a cell phone cpu company. And, now, theres some grace hopper performance i know that sounds like a strange name, but this is jensen. You have been talking about grace hopper and so was rene haas. I dont know if you an outfit called ml pert that does these absolute testings, and the grace hopper is by far the fastest. Also, its not hot. But the big win here was when they dislodged intel and dislodged amd, and yet theres intel as an anchor tenant. Interesting, huh . Yeah. Why . Why not get as many anchor tenants as you can . Intel got aced out. They still do a lot. They do. But i just come back and say, look, if we want to make this into an a. I. Company, theres a hundred other companies that we can make into a. I. Companies. When i was out there at salesforce, carl, Everyone Wants to present themselves as an a. I. Company, and you know, when you get into the nittygritty, bank of america is an a. I. Company, and that could be real, because theyre graded on efficiency. In other words, the real win is on gross margin, not on growth. And thats a really important consideration. We all want growth. We dont care as much about gross margin, but so far, a. I. Is about gross margin. Making it cheaper. Find out whos efficient and frankly, attrition on people who are coders. Its interesting. Some of the reaction to certainly oracles quarter and dreamforce today is that the promise is there. The execution part is really cloudy. Very cloudy. Thats one of the reasons jpmorgans take on oracle yesterday, for example. Well, look, i thought we have oracle world next week, so lets see what Larry Ellison says. I had laura albert on last night, williams sonoma. I know it sounds like, wait a second, this is not the retailer. But theyre a Digital First retailer, so they are actually they have the data. They have data worth mining. Most companies dont know what the data is, but the real data use is trying to figure out realtime insurance pricing. And or also, you know, whats it how do you price a beach house . Well, lets just look at all the Beach House Properties in america and find out how to price it, because we dont want an outlier who then wipes out all of our all the, you know, all the savings we have, and thats the kind of prosaic i have to tell you. A. I. Is incredibly boring. Incredibly boring . Whats the use case . Im going to talk to frank slootman, because you know what it is . Its auto finance. Its plastics. Thats the use case. Plastics. Theres a lot of use cases. No, but you want an a. I. Company, we can talk about microsoft, how about that . All right, but its not exciting. Copilot. I was going to say, everybody tells me, jim, it could be your copilot. My wifes the copilot. She doesnt cost me anything. They had a Developers Conference yesterday in new york. My wife . No, microsoft, talking about copilot. Could be available very soon. Oh, really . This is why you said so much is riding on adobe. Oh, my god, tonight is so big. Because oracle was a miss. Adobe has to be a hit. Theres a ton of news to get to as we said earlier. The clock is ticking for the uaw and the d3 as this potential Midnight Strike looms tonight. Plus in the next hour, sara is going to sit down exclusive with citadels ken griffin, talk about everything from markets to the fed to education. Futures have been holding in er en with some of the swirling around on the hot data today. Retail sales, up 0. 6 , looking for 0. 1 . More squawk on the street when we come back. But our Network Connects global businesses across nearly 160 markets. Were not a startup, but our Innovation Labs use new technologies to help keep your information secure. Were not architects, but we help build stronger communities. Were not just any bank. We are citi. sirens [due at target in 5 ] copy that. Make a hard left down the alley. Networks got you covered. [please confirm requesting backup. ] changing route. Go. Roadblock ahead. Back up, back up. Reverse reverse next level moments, were 30 seconds out. Need the next level network. [north corridor, hurry ] coming through or 3, lets go. The network more businesses choose. Transplant received. At t business. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Wow, you get to watch all your favorite stuff. Its to die for. And its all right here. Streaming was never this easy, you know. This is the way. You really went all out didnt you . Um, its called commitment. Could you turn down the volume . Here, you can try. Get way more into what your into when you stream on the xfinity 10g network. Tension until the auto business today, the uaw and detroits big three remain far apart in negotiations. Union is preparing to strike at midnight. This is what the president of the uaw, shawn fain, said last night about the talks. Were making progress at each of the three negotiating tables. But as you just heard, were still very far apart on our key priorities. From job security to ending tiers, from cost of living allowance to wage increases, we do not yet have offers on the table that reflect a sacrifice and contributions our members have made to these companies. To win, were likely going to have to take action. And just as we have approached our negotiations differently than we have in the past, we are preparing to strike these companies in a way theyve never seen before. Oh. Jim, you said ford does have the best offer, i think, at 20. Well, i want to posit something. The man you saw just now, i think, is a paper tiger. Hes coming in and saying, well, theyve never seen anything like it. I think theres a Nuclear Option on the table if hes not careful. That Nuclear Option is a country called mexico. You dont hear about it much. But if you say, were in intransigent and were going to stay at 40 , theres no give, well, you know what . Monterrey, puebla theres the capacity to have that happen. Not overnight, certainly. Mercedes did it in two years. Two years would be a long time. They dont have that much demand. You put that out there, and you say, listen, all the you want to know where the new ones are going to be made . Were going to make the old ones, but puebla has a 55,000person factory for vw, a good educational workforce, 5 an hour, no real push on control rules, thats not to be mentioned. Free health care. You want to play ball . You want to keep doing this . Mexico. Glad to see youre standing up for the American Worker here, jim. Thanks for that. I was a union member twice. One was completely corrupt and i led a wild card strike and was fired. That was not good. You seem to think the automakers have the upper hand. The union you could say theyre way behind, the wages arent the same as his point would be that they have they havent kept up with even base inflation since 2007. So you go to 25 . Is he not satisfied with 25 increase in i think most of america fords the most unionized company in america. It is. What about the way that they say theyre going to strike, which would be not cross the board but stellantis oh, you mean targeted factors . You target the f150 because it makes a lot of money. They can build a hybrid very easily in monterrey. B of a took a crack at that, what theyre calling a standing strike, where you go after individual facilities. Their argument is it would be very difficult and inefficient for any of the operators to coexist with that, so they see likely if it goes that way, makes sense to shut down, lay off the workers, and restart if and when you get a deal. Look, i think this man i would not say that shawn fain is a paper tiger had they you just said he was a paper targ. I wouldnt say if they had raised a lot of money in the strike fund. Their strike fund is five weeks. 600 a week, and then youre out of money. People like to get paid. You cant hold out. I mean, these guys are not, like, running backs. Theyre not like a running back whos going to hold out and get a big deal. Theres no big deal if you hold out. And youve got to put food on the table. Im saying that shawn fain, he sound like hes the president of the United States. No. President of something higher than the United States. Hes not. And he won by a very slim amount, and i have a factory in mexico, let me tell you something. Its fantastic. Well, my wife does. We are going to hear from the president later today on economic policy. That will be interesting. I imagine this might get discussed. When we come back, a lot more of davids exclusive with arms chief rene haas and masa son. To address operations issues . We can help with that. Can we provide health care virtually anywhere . We can help with that, too. Is it possible to survey foot traffic across all of our locations . Yeah absolutely. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. drumroll by lonis, Little League this just in got the keys to what you want and what you need something new Something Sweet moving to a different beat okay now what . can i get a get a drumroll . what . can i get a drumroll drumroll . what . can i get a can i get a drumroll please oohh thats nice yahh ya, can i get a drumroll, can i get a drum thats nice welcome back to squawk on the street. Time for our mad dash. Of course, we have an opening bell about seven minutes from now. Lets talk a little amazon. This Morgan Stanley note basically says, david, were at day one of gap profitability, 5 of earnings per share. This is a note which is basically saying that management has figured out how to make a lot of money again, kind of 2019, on retail. David, you know, this is this thing had a tie yesterday. Jassy is in his prime. Jassys back. Now, jassy got his head beat in by the cowboys, but thats okay. Im an eagles fan. I think hes struggling to deal with that. But hes not struggling to deal with workforce. Hes not struggling to deal with t