Chipmaker Nvidia is in advanced negotiations to buy chip design firm Arm, according to unnamed sources in a story in Bloomberg.
SoftBank Group owns Arm, which it bought for $32 billion four years ago. Arm and Nvidia hope to reach a deal in a few weeks, the report said.
Nvidia declined to comment and Arm did not respond to a request to comment.
The deal could amount to the most expensive acquisition in the semiconductor industry, which has been consolidating even though analyst firm Omdia counts 150 different semiconductor makers globally. Every year, the largest 10 semi makers grow larger in revenues, while the remaining 140 grow smaller, Omdia analyst Kevin Anderson said recently.
Nvidia, like many chipmakers, is an Arm customer, using its architecture to build its own chips, many used in high performance computing and artificial intelligence work. Arm technology is used in Apple chips, as well as chips from Qualcomm, AMD and Intel.
All of Nvidia’s competitors using Arm are likely to object to the deal or at least demand Nvidia would allow access to Arm designs. SoftBank has been neutral in the past.
"I believe there will be serious opposition to this deal," Anderson said on Friday.
"Arm CPU cores are widely embedded into processing chips by most major semiconductor companies who rely on equal access to the Arm IP though their licensing model. They will be concerned that Nvidia will enjoy an earlier access and that the core roadmap will be tailored towards Nvidia’s needs more than the general market’s," Anderson said.
Omdia analyst Tom Hackenberg agreed that Nvidia or any other Arm buyer would face monopoly lawsuits and conflicts of interests from their competitors who would also be clients using Arm designs. "If Nvidia buys Arm, there is little to no competition for embedded graphics," he said. Hackenberg said rumors have circulated for some time that Nvidia, Intel or Xilinx would buy Arm after Softbank began feeling around for someone to bid on Arm.
Nvidia was the ninth largest semiconductor maker in 2019 with $9.5 billion in revenues, putting it behind frontrunner Intel as well as Micron, Broadcom, Qualcomm, Texas Instruments and ST Micro among others.
In addition to concerns from competitors, Nvidia would face reviews from regulators around the globe.