NVIDIA is reportedly close to closing a $40 billion deal that would net them one of the most valuable companies in the tech industry: Arm. While companies like Qualcomm and MediaTek are the ones that produce processors for phones and other mobile devices worldwide, all of their work would not have been possible if not for Arm’s technology and design.
Most, if not all, processors that are used for mobile devices like phones, tablets, and IoTs are all based on Arm’s technology – in fact, its licensees have shipped around 160 billion chips using their design as of press time, which obviously makes the company an incredibly valuable asset.
Softbank, which acquired Arm back in 2016 for $32 billion, initially did not want to let go of such a valuable company but losses it incurred in bad bets like Uber and WeWork, as well as the financial crisis caused by the modern plague (AKA COVID 19), have had them looking at their options. The Wall Street Journal reports that Arm and NVIDIA have been in exclusive talks for several weeks, with a potential deal being sealed this week according to insiders.
If the deal goes through, the sale would be the biggest ever in the semiconductor industry. NVIDIA has been having a good run as of late, thanks to its dominance in the GPU market that’s not only used for video games but in cloud computing and AI as well.
But if the sale goes through, it’s likely that NVIDIA will be in for a tough regulatory hurdle, as there will be intense anti-trust scrutiny considering that Arm licenses its technology to a big swath of tech heavyweights, including Apple, Qualcomm, Intel, and Huawei. Arm’s ubiquitousness in the industry has largely been driven by its neutrality which may now be in jeopardy if the sale goes through.