Nvidia is reportedly in 'advanced talks' to acquire Arm Holdings

Joanna Estrada
August 1, 2020

Any deal with Nvidia, which is a customer of Arm, would likely trigger regulatory scrutiny as well as a wave of opposition from other users of the company's technology. Representatives for Nvidia, SoftBank and Arm declined to comment.

Concerns about antitrust were what originally resulted in SoftBank, a neutral party, acquiring Arm Holdings the last time it went up for sale. There are only a finite number of companies that would be able to handle a major acquisition along these lines, and it would potentially be a huge boost to Nvidia's long term business goals, but negotiations surrounding these kinds of acquisitions can be very tricky to navigate on all sides, and any of a number of unexpected turns could halt the entire deal.

An Nvidia deal makes sense, though Nvidia is a relatively small company compared to the other obvious suitor, Intel.

"With Nvidia's low-priced fabless model enabling it to focus on R&D, engineering and programming, the fit with Arm would be ideal", said Neil Campling, an analyst at Mirabaud Securities.

SoftBank acquired Arm in 2016 and paid $32 billion for the firm.

The three reasons Nvidia said it was making a big investment in Arm for high-performance computing: more choice, an open platform and improved energy efficiency for customers. "Strategically, Nvidia needs a scalable CPU that can be integrated into its GPU roadmap, as is the case with AMD and Intel".

Billionaire Masayoshi Son has been selling some of SoftBank's trophy assets as seeks to pay down debt at the Japanese conglomerate. Prior to that, reports said SoftBank was looking to either sell Arm or return the chip designer to the public market through an initial public offering.

Arm is becoming more valuable as the company pushes for its architecture to be used in more smart cars, data centres and networking gear.

Nvidia is already the largest graphics chipmaker in the world, and a purchase of Arm Holdings could propel the company to become a significant player in the silicon industry. The stock has more than doubled over the past year. The stock was little changed Friday in NY.

Other reports by Click Lancashire

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