SoftBank Nears Deal to Sell Arm to Nvidia

Ruben Fields
September 14, 2020

With Arm under its control, Nvidia could singlehandedly dictate the future of companies like Apple and Samsung that rely on Arm-based chips.

A NVIDIA + Arm marriage has been rumored for weeks while a deal consisting of cash and stock could come as soon as next week.

Should the two sides strike a deal for Arm, it would net billions for SoftBank as it seeks to sell assets as part of a business turnaround.

"Nvidia is the ideal partner for Arm", said Masayoshi Son, SoftBank chairman and CEO.

The deal will need to be approved by regulators in the UK, China, the European Union, and USA, which is expected to take about 18 months.

Nvidia is planning on building an AI supercomputer, powered by ARM technologies. Pioneering companies in the industry include the technology company IBM. But it does not have a market share when it comes to the CPU design. Chips that use its code and its layouts are in everything from factory equipment to home electronics. Instead it licenses out the underlying know-how so others could make chips with it.

Arm, with headquarters in Cambridge, England, has carved out a successful niche for itself by being independent. SoftBank and Arm did not respond to Reuters' requests for comments. The value of ARM chips has only gone up in recent times.

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However, as with most tech-related deals these days, the purchase of ARM by NVIDIA could set off antitrust alerts.

Shares in SoftBank, which is led by billionaire Masayoshi Son, on the Tokyo Stock Exchange are down a little over 10% so far in 2020 and are trading at 1,307.50 yen.

His latest successful recasting of Nvidia's technology involves the processing of artificial intelligence work done in data centers. His chips are among the best at breaking up the manipulation of data into small pieces and then executing that in parallel at high speed.

Huang will also get a large footprint in the mobile industry and smartphones. The biggest rival to Qualcomm in smartphone processors is Apple's own internal effort.

"Upon completion of the proposed transfer, Arm will deepen its focus on its core semiconductor IP business and expects to continue collaborating with the new ISG businesses" the company said.

Even without a presence in mobile, Nvidia's value has soared in the last decade.

Nvidia recently overtook Intel in becoming the world's most valuable chipmaker.

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