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Nvidia already in advanced talks to buy ARM for more than US$32 billion

The deal could go through for around US$40 billion. (Image Source: Go4IT)
The deal could go through for around US$40 billion. (Image Source: Go4IT)
Nvidia is inching closer to sealing the deal for what looks like more than US$40 billion, but analysts think that Nvidia might actually ruin the entire value proposition of ARM with this move. Apple, Qualcomm and Samsung will try to oppose this as much as they can.
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A week ago, chatter about a possible ARM acquisition initiated by Nvidia started permeating the media, but many analysts were skeptical this huge deal could actually go through since it would create problems for companies like Apple, AMD, Qualcomm and Samsung who are long-standing clients of the British company. Despite the skepticism, it looks like the acquisition talks are advancing well and Nvidia is even closer to sealing the deal now, as reported by Bloomberg.

The actual value of the transaction in question is still unknown. SoftBank, the current owner of all ARM shares bought the British company for US$32 billion in 2016, so the value is clearly higher now. If Nvidia agrees to pay more than what SoftBank originally paid, this could result in the largest-ever deal recorded in the semiconductor industry. There is no final decision yet, meaning that Nvidia might still pass on the opportunity if no agreement is reached in a timely manner. In this case, SoftBank could decide to pursue an initial public offering for US$44 billion next year, and if a deal is not struck by 2025, ARM could potentially be worth US$68 billion at that point, according to New Street Research LLP.

It is not entirely clear how U.S. regulators are going to allow for the Nvidia-ARM deal to go through. ARM already has a list of big clients including Nvidia itself, and some of said clients are even Nvidia’s direct competitors. These companies may immediately demand assurances that a new owner would continue providing unrestricted access to all ARM’s IPs and licenses. SoftBank did not have this problem back in 2016, since it was viewed as a neutral company.

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Bogdan Solca
Bogdan Solca - Senior Tech Writer - 1464 articles published on Notebookcheck since 2017
I first stepped into the wondrous IT&C world when I was around seven years old. I was instantly fascinated by computerized graphics, whether they were from games or 3D applications like 3D Max. I'm also an avid reader of science fiction, an astrophysics aficionado, and a crypto geek. I started writing PC-related articles for Softpedia and a few blogs back in 2006. I joined the Notebookcheck team in the summer of 2017 and am currently a senior tech writer mostly covering processor, GPU, and laptop news.
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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2020 07 > Nvidia already in advanced talks to buy ARM for more than US$32 billion
Bogdan Solca, 2020-07-31 (Update: 2020-07-31)