The attack took place on Currie Street around 12.30am Sunday in front of dozens of people.
Cassandra Tombs, who owns a bar next door to where the attack occurred, said her customers and staff witnessed the “horrific” moment the alleged victim fell to the footpath.
“There was literally blood coming out… like a horror movie,” Ms Tombs said.
Strangers rushed to help the 21-year-old man and a staff member used tea towels to try to stop the man bleeding.
He was then rushed to hospital.
In the early hours of this morning, police arrested a 20-year-old man at a Hindley Street convenience store.
Half a dozen police officers and detectives combed through an Adelaide laneway in search of a weapon.
9News was on the scene when a Stanley knife was found dumped in a bin. It is believed to be the weapon used in the incident.
The 20-year-old man who was arrested has been charged with attempted murder.
He will face court tomorrow.
Authorities believe the accused and victim are known to each other.