NVIDIA rumored to pay $40 billion for ARM Holdings

Back in July, we told you that Japan’s SoftBank was talking to American GPU manufacturer NVIDIA about selling it ARM Holdings. The latter’s main business is the design of CPU cores such as the 64 bit Cortex-A78 CPU core. Both sides are closing in on a deal that would be valued at over $40 billion. The deal would give SoftBank a multi-billion dollar profit after it purchased the company for $32 billion. NVIDIA is the world’s third-largest GPU supplier and ARM is the third-largest in the world thanks to its Mali line of graphic chips.

The Journal report noted that ARM and NVIDIA have been talking on an exclusive basis over the last few weeks and a deal could be announced as soon as early next week. NVIDIA’s shares have soared over 100% this year thanks to heavy demand for its GPUs which are used in video games, cloud computing, and in other devices that have taken off thanks to the coronavirus. If a deal can be agreed to not only would it be one of the biggest transactions of the year, it could also be the largest deal of all time involving the purchase of a semiconductor company.

However, as with most tech-related deals these days, the purchase of ARM by NVIDIA could set off antitrust alerts. Regulatory agencies could put such a deal under intense scrutiny and ARM customers like Samsung and Apple could try and put the kibosh on the transaction. If the merger closes, NVIDIA would control the pricing on ARM’s CPU cores and Adreno GPU chips along with the pricing of the Mali GPU line.

According to the Journal, SoftBank has been working with a small team on the final terms of the ARM deal. The team includes ARM CEO Simon Segars and Chief Financial Officer Yoshimitsu Goto.