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NVIDIA may buy Arm in huge shakeup of chip industry (Updated)

Update: What was once just a rumor has now escalated to "advanced talks."

Published onJuly 31, 2020

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Update, July 31, 2020 (11:45 AM ET): In the original article below, we describe a prominent rumor that NVIDIA could be interested in buying Arm Holdings. However, a new Bloomberg report has escalated the rumor: now, it seems, NVIDIA is in “advanced talks” for the acquisition.

The report suggests that NVIDIA would buy Arm Holdings from its current owner SoftBank for $32 billion. Allegedly, NVIDIA is the only buyer with which SoftBank is in negotiations.

If this deal goes through, it would be an enormous shakeup not only for the silicon industry, but also for the tech industry in general. Stay tuned as this continues to develop.

Original article, July 22, 2020 (05:46 PM ET): NVIDIA might become a dominant force in computing by making its most important acquisition yet.

Bloomberg sources claim NVIDIA “made an approach” to buy chip design giant Arm in recent weeks. It’s not certain how serious the offer is, and Japanese tech giant SoftBank may simply decide to list Arm instead. However, any deal would be expensive — SoftBank bought Arm in 2016 for $32 billion.

Arm, NVIDIA, and SoftBank have all declined to comment.

What would an NVIDIA buy of Arm mean?

SoftBank might have an incentive to sell. The company has been selling off assets to help it endure the COVID-19 pandemic, and Arm recently offloaded two Internet of Things groups to SoftBank to narrow its focus. NVIDIA would help SoftBank concentrate on other important businesses.

If a purchase went ahead, though, it would be one of the most important deals in the chip industry’s history. Arm creates and licenses the basic architecture for most of the world’s mobile processors, and is increasingly influential in general computing. Arm currently powers the world’s most powerful supercomputer, Japan’s 1-exaflop Fugaku, and will be at the heart of Apple’s future Mac chips.

Read more: Arm vs x86: Instruction sets, architecture and all key differences explained

For NVIDIA, a deal could help it design and optimize chips for everything from portable devices like the Nintendo Switch through to PCs and servers. It wouldn’t have to wait as long before it starts customizing chips, and could even have Arm design architectures with NVIDIA hardware in mind.

A move like this would also face very close scrutiny from government officials. NVIDIA would effectively control the future of most phones, tablets, and computers. There’s a real concern that NVIDIA could limit access to Arm technology, or design features that favor its own products at the expense of everyone else. Competitors would want guarantees of fair treatment, and officials aren’t guaranteed to allow a deal even under those terms. It would represent a big gamble on NVIDIA’s part — albeit one with a major payoff if it proves successful.

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