Nvidia is considering an acquisition of British chip designer ARM, which Japanese conglomerate SoftBank bought in 2016.
Citing people familiar with the matter, Bloomberg reports that Nvidia has approached SoftBank recently over a buyout, although there is no guarantee that the talks will lead to a deal.
Other potential bidders could also emerge in the coming days, according to the sources.
Earlier this month, the Wall Street Journal reported that SoftBank was mulling plans to sell or spin off Cambridge-based ARM in an initial public offering (IPO). The report also claimed that SoftBank had engaged Goldman Sachs to explore strategic options for the business.
Nvidia's reported interest in ARM comes after it started working more closely with the chip designer last year to enable GPU-accelerated, ARM-based servers. Announcing the new partnership in November 2019, Nvidia said that its ARM-based reference design platform had also received support from Hewlett Packard Enterprise, Marvell, Fujitsu, Cray and Ampere.
However, analysts are unenthusiastic about the idea of the acquisition, believing that ARM's value could drop if it were acquired by a single vendor. Nvidia is also a licensee of ARM chips and its deal could trigger opposition from other licensees.
SoftBank 2016 acquisition of ARM Holdings, for $32 billion, was the company's largest-ever acquisition at the time. SoftBank's chairman Masayoshi Son and ARM CEO Simon Segars described the deal as historic, saying it would bring together the two companies "with a shared vision and ambition, driven to empower the world with technology that makes life easier, safer and more fulfilling."
Softbank currently needs more cash to support firms in its $100 billion Vision Fund, many of which have been struggling since the start of coronavirus pandemic. The company is looking to raise cash from its varied stable of assets and plans to sell up to $41 billion in assets to buy back its own shares.
ARM CEO Segars said last year that SoftBank wants to return the chip designer to the public market by 2023.
According to Bloomberg, SoftBank has also approached Apple as part of the sale process, but the iPhone maker is not planning to pursue a bid. That is because ARM's licensing operation would not fit properly with Apple's hardware and software business model. The deal may also be blocked by regulatory bodies over concerns about Apple owning a key licensee that supplies so many competitors' chips.
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