Graphics giant NVIDIA to acquire SoftBank’s ARM

To everyone’s surprise, a new report from Bloomberg has stirred everyone in the industry, yes, you heard it right – Nvidia is pursuing to buy the UK based chip design company Arm Ltd., owned by SoftBank Group Corp.

Obviously this is not official but sources of Bloomberg said Nvidia could possibly make an approach in recent weeks about a potential deal for Arm Ltd. This speculation comes in the middle of the fact that SoftBank to sell part or all of its stake in Arm via a private deal or public stock listing, the news already reported this month.

The graphics giant Nvidia seems interested in Arm, which is still unclear if they will totally pursue to buy the chip design company, but SoftBank may still opt to pursue a listing. If this deal somehow takes place then this could possibly become the biggest-ever acquisition in the chip industry.

Arm is currently owned by SoftBank and its $100 billion Vision Fund, it was bought by the Japanese group at the time when it was the U.K.’s largest listed technology company, for about $32 billion in 2016. Nvidia has grown massive in the last few years, thanks to its continuous growth in the gaming industry and AI & cloud, it has generated a lot of revenue with a market value of about $254 billion. 

Shares of Nvidia have risen almost eightfold over the same period and it has even surpassed the likes of Intel in terms of market value earlier this month. So, buying a company like ARM is not a big deal for the graphics giant which can benefit either way.

On the other hand, Softbank is trying to sell its stakes due to the COVID-19 pandemic which has led to a huge economic disruption across the globe so that it can replenish its cash reserves. ARM was sold to Softbank so that none of the chip design companies could be biased as it has a lot of clients in the silicon market like Huawei, Apple, MediaTek, Qualcomm, Samsung, and a lot more.

ARM’s instructions set has become a standard for any kind of chip manufacturing, the tech behind 2 billion custom processors by Apple shipped in various iPhones and other Apple devices. Also, this year Apple is trying to makes its own Arm-based silicon to power Macs, so ARM is an important partner for the Cupertino giant.

Even some company buys ARM but as the company sells semiconductor designs and instruction sets to its potential clients, it would trigger regulatory scrutiny. It is because every client out there would be demanding assurance from the new owner provide equal access to ARM’s instruction set, which is why SoftBank, a neutral company is an ideal owner, but now speculations surrounding Nvidia, this should pose a danger to a lot of ARM’s current clients.

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