Report: Nvidia Approached Arm About Acquisition

News
By Andrew E. Freedman
published

A potentially huge chip deal

Building with Arm logo on it
(Image credit: Shutterstock)

Nvidia has expressed interest in acquiring Arm, according to a report from Bloomberg.

The news site's sources are anonymous and suggested that there may be other possible bidders. They also claimed that Arm parent company SoftBank may ultimately opt to sell shares of the company on the public market.

The British chip designer is owned by the Japanese group and is part of its $100 billion Vision Fund, the world’s largest venture capital fund.

Spokespeople for Nvidia and Arm both individually told Tom's Hardware that the companies don't comment on "rumors" or "speculation."

SoftBank's Vision Fund was previously one of Nvidia's largest investors, but it sold its entire $3.6 billion worth of stocks early last year. The news that SoftBank was considering selling the chip designer or moving to an IPO broke just over a week ago.

As Bloomberg pointed out, any potential acquisition of Arm could come under intense regulatory action, as so many companies rely on its expertise and instruction set and would want to ensure continued access.

Updated July 22, 3:48 p.m. ET with comment from Nvidia and Arm.

Andrew E. Freedman

Andrew E. Freedman is a senior editor at Tom's Hardware focusing on laptops, desktops and gaming. He also keeps up with the latest news. A lover of all things gaming and tech, his previous work has shown up in Tom's Guide, Laptop Mag, Kotaku, PCMag and Complex, among others. Follow him on Threads @FreedmanAE and Mastodon @FreedmanAE.mastodon.social.

25 Comments Comment from the forums
  • hotaru251
    this would be actually good imho.

    they have the $ to make it progress.

    always wanted Team green to be with team blue and red and compete for cpu's.
    Reply
  • bit_user
    hotaru251 said:
    they have the $ to make it progress.
    Really? Details, please.

    I'm curious how they would even fund this acquisition. Stock swap, I guess? I thought they blew most of their cash on the Mellanox acquisition. That was only like $7B, and I presume most of that cash was left over from the mining boom.

    According to Wikipedia, ARM was valued at £23.4 B, when Softbank acquired them in 2016. Presumably, they're worth significantly more, now.

    Nvidia's market cap seems more than big enough, but the ironic thing about that is it would just put a bunch more NVDA stock in Softbank's hands, not long after it unloaded what it previously held.
    Reply
  • nofanneeded
    I thought that Google would buy it , Nvidia is not huge enough for this ..
    Reply
  • Chung Leong
    bit_user said:
    I'm curious how they would even fund this acquisition.

    With borrowed money, of course, collateralized against ARM's IP assets. Raising the necessary amount shouldn't be a problem in the present environment.
    Reply
  • DZIrl
    No chance! When Apple announced Macs with ARM this for sure means they are interesting in buying ARM. Cause ARM is owned by a bank and bank complains about income shortage this means we will have a sell. If Apply buys ARM this means death to everyone cause we will start paying fees and good bye to cheaper Androids.
    What a nice knife in the Qualcomm back! They are going to pay 10 times back to Apple.
    Reply
  • bit_user
    Chung Leong said:
    With borrowed money, of course, collateralized against ARM's IP assets. Raising the necessary amount shouldn't be a problem in the present environment.
    Yeah, the phrase "leveraged buyout" was bouncing around in my head. I'm not 100% sure if that's essentially what you described.
    Reply
  • bit_user
    DZIrl said:
    If Apply buys ARM this means death to everyone cause we will start paying fees and good bye to cheaper Androids.
    What a nice knife in the Qualcomm back! They are going to pay 10 times back to Apple.
    That's an interesting and disturbing idea.

    ...or, if Qualcomm bought ARM, it could mean bad news for Apple & others.

    Anyway, as long as it's bought by a US company, it's likely that monopoly laws would prevent pricing so high that it would destroy the competitive landscape. Still, it's hard to see how the landscape wouldn't at least be unsettled.
    Reply
  • Chung Leong
    DZIrl said:
    No chance! When Apple announced Macs with ARM this for sure means they are interesting in buying ARM.

    Why the heck would Apple acquire ARM? It doesn't want to become a tech licensor. The last time it did that the company nearly went belly up.
    Reply
  • gg83
    I think Nvidia is scrambling to maintain its position long term. I listen to Corteks on YouTube and he said dedicated GPU's will be replaced by apu's and such. What do you guys think? Nvidia would love to own cpu IP right?
    Reply
  • bit_user
    Chung Leong said:
    Why the heck would Apple acquire ARM? It doesn't want to become a tech licensor. The last time it did that the company nearly went belly up.
    That was with its OS, and Apple had other issues besides. It was only a couple years prior to Jobs' return, though I don't know whether they stopped licensing clones before or after. It was detrimental, mainly because Apple couldn't make the same amount of money selling their OS as they'd been making by bundling it with their overpriced hardware. I don't think the same situation would necessarily apply, here.

    Anyway, it could hold ARM as a wholly-owned subsidiary, leaving it to do business as usual (except for giving Apple favorable licensing terms). What would be weird about that model would be to have two parts of the business independently designing ARM cores.

    Another option would be to merge ARM with its own internal core design group. In that model, maybe they'd keep licensing cores, but not necessarily. Perhaps they'd just license the ISA and software tools & support, but leave it to 3rd parties to do their own designs. There'd have to be a multi-year phase-out of their current business model, in order to avoid breaking existing commitments.

    In between the two extremes, ARM could continue designing and licensing microcontrollers and server cores, while keeping the mobile and desktop-oriented cores internal to Apple.
    Reply