Nvidia is Reportedly in Advanced Talks to Acquire ARM

Article By : Bolaji Ojo

Nvidia Corp. is reported to be in talks to purchase Arm from SoftBank. If true, the move would ignite a firestorm of negative reactions…

Nvidia Corp. is reported to be in “advanced talks” to purchase Arm Holdings Plc., according to reports. If completed, this move is expected to give Nvidia a much broader footprint in the semiconductor industry, but would result in a multi-year regulatory review that could hurt both Arm and Nvidia…

Bloomberg and the Financial Times independently confirmed the courtship. Both Nvidia and Arm are expected to arrive at some sort of agreement over the next few weeks. The Nvidia-Arm deal could value Arm at more than $32 billion, the price at which it was acquired by SoftBank in 2016.

Why Nvidia could be considering such a move is obvious. The GPU maker’s market value has rocketed to its highest level since it went public in January 1999, surpassing the capitalization of Intel Corp., the global No. 1 semiconductor supplier by revenue. Leveraging the lofty stock price, low borrowing rates and strong cash position to make a major, market-defining acquisition, would seem to make sense.

Nvidia holds a commanding position in the GPU segment and is a darling of OEMs in the gaming and visual computing market, artificial intelligence, automotive, cloud and data services, software developments, design engineering, autonomous machines and other intense applications. It has more than 1.6 million registered developers and is favorably viewed by many.

The acquisition of Arm from Softbank would add critical CPU intelligence and ownership to Nvidia’s product base, but it is difficult imagining any other major benefits. Even the CPU technology is available under license from Arm without direction ownership and the negative pressure that would immediately follow such a deal…

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