Apple has secured a deal with Arm that extends through 2040 and “beyond,” according to a filing with the U.S. Securities and Exchange Commission. Arm, owned by SoftBank, is set to go public on the Nasdaq stock exchange with a potential valuation of up to $52 billion, making it the biggest technology IPO of the year. The agreement between Apple and Arm ensures the tech giant’s access to the Arm architecture, which is a fundamental component of its iPhone and Mac chips, for the foreseeable future.

Arm’s architecture is used in the majority of smartphone chips, including Apple’s A-series for iPhones. It defines how a central processor operates at its most basic level, such as performing arithmetic operations or accessing computer memory. Switching to a different instruction set is a costly and complex process, making continued access to Arm’s technology crucial for Apple’s chip development.

Arm’s customer-friendly licensing approach allowed companies to invest heavily in developing Arm-based chips without fear of losing access to the technology. This approach was a key reason why regulators blocked Nvidia’s attempt to acquire Arm, leading to the decision to take Arm public.

The long-term agreement between Apple and Arm reassures investors and industry partners that Apple will continue to use Arm’s architecture in its devices. Companies like Apple, Google, Nvidia, Samsung, AMD, Intel, and others have expressed interest in buying shares in Arm’s IPO, which would grant them ownership stakes and influence over Arm’s management.

This deal underscores Apple’s commitment to its chip design strategy and ensures it has access to crucial intellectual property for its future devices.

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