Nvidia close to purchasing chip designer ARM

Chip designer ARM, behind the most popular processor architecture in the world, may be about to change hands again.

The Cambridge-based company was purchased by Softbank in 2016 for $31 billion, and Softbank is reportedly eager to offload the asset as it battles losses due to poor investments such as WeWork and Uber.

Nvidia is reportedly in advanced negotiations to purchase the company, which could be worth as much as $55 billion today. Nvidia is currently worth around $260 billion, surpassing Intel.

“With Nvidia’s low-cost fabless model enabling it to focus on R&D, engineering and programming, the fit with Arm would be perfect,” said Neil Campling, an analyst at Mirabaud Securities.

ARM’s chip designs are used by licensees such as Samsung, Apple and Qualcomm, as well as Nvidia and there is concern that ownership by the company would lead to unfair competition. Nvidia already makes GPUs, and as the world moves towards ARM chips for even desktop and server applications, owning ARM may give the company the perfect package to take on Intel and AMD.

“You need control of BOTH CPU and GPU roadmaps and this, of course, includes data centers,” wrote  Rosenblatt Securities analyst Hans Mosesmann in a note Friday, referring to central processing units and graphic processing units. “Strategically, Nvidia needs a scalable CPU that can be integrated into its GPU roadmap, as is the case with AMD and Intel.”

It is therefore likely any deal with Nvidia would trigger regulatory scrutiny as well as a wave of opposition from other stakeholders.

Negotiations have not been finalized yet, but may complete in the next few months, though Nvidia is believed to the only serious suitor at present.

via Bloomberg