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Nvidia in Advanced Talks to Buy SoftBank’s Chip Company Arm - according to people familiar in the matter


(can someone please please fix title? misread it as first, "people familiar in the matter was about the amount softbank bought ARM for)


Nvidia Corp. is in advanced talks to acquire Arm Ltd., the chip designer that SoftBank Group Corp. bought for $32 billion four years ago, according to people familiar with the matter.

The two parties aim to reach a deal in the next few weeks, the people said, asking not to be identified because the information is private. Nvidia is the only suitor in concrete discussions with SoftBank, according to the people.

A deal for Arm could be the largest ever in the semiconductor industry, which has been consolidating in recent years as companies seek to diversify and add scale. But any deal with Nvidia, which is a customer of Arm, would likely trigger regulatory scrutiny as well as a wave of opposition from other users.

Cambridge, England-based Arm’s technology underpins chips that are crucial to most modern electronics, including those that dominate the smartphone market, an area in which Nvidia has failed to gain a foothold. Customers including Apple Inc., Qualcomm Inc., Advanced Micro Devices Inc. and Intel Corp., could demand assurances that a new owner would continue providing equal access to Arm’s instruction set. Such concerns resulted in SoftBank, a neutral company, buying Arm the last time it was for sale.

No final decisions have been made, and the negotiations could drag on longer or fall apart, the people said. SoftBank may gauge interest from other suitors if it can’t reach an agreement with Nvidia, the people said. Representatives for Nvidia, SoftBank and Arm declined to comment.

Divestment Drive
“With Nvidia’s low-cost fabless model enabling it to focus on R&D, engineering and programming, the fit with Arm would be perfect,” said Neil Campling, an analyst at Mirabaud Securities.

Nvidia is the largest maker of graphics processors and it’s spreading the use of the gaming component into new areas such as artificial intelligence processing in data centers and self-driving cars. Marrying its own capabilities with central processor units designed by Arm may enable it to take on Intel and Advanced Micro Devices in a more comprehensive way, according to Rosenblatt Securities analyst Hans Mosesmann. He estimates Nvidia would have to pay about $55 billion for Arm.

“You need control of BOTH CPU and GPU roadmaps and this, of course, includes data centers,” he wrote in a note Friday, referring to central processing units and graphic processing units. “Strategically, Nvidia needs a scalable CPU that can be integrated into its GPU roadmap, as is the case with AMD and Intel.”

Billionaire Masayoshi Son has been selling some of SoftBank’s trophy assets as the company seeks to pay down debt at the Japanese conglomerate. SoftBank has offloaded part of its stake in Chinese internet giant Alibaba Group Holding Ltd. and a chunk of its holdings in wireless carrier T-Mobile US Inc.

SoftBank has been exploring options to exit part or all of its stake in Arm through a sale or public stock listing, Bloomberg News has reported. The chip-design company could go public as soon as next year if SoftBank decides to proceed with that option, people with knowledge of the matter have said.

Arm has become more valuable as it pushes its architecture into smart cars, data centers and networking gear. The company could be worth $44 billion if it pursues an initial public offering next year, a valuation that may rise to $68 billion by 2025, according to New Street Research LLP.

Nvidia, based in Santa Clara, California, is the world’s largest graphics chipmaker. The stock has surged more than twenty-fold in the past five years, giving the company more firepower to do large deals. Nvidia’s market value has increased to more than $260 billion in that time, surpassing Intel. The stock was little changed Friday in New York.
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There are millions of whiny 5-year olds on Earth, and I AM THEIR KING.
I have confidence on this deal happening. Nvidia understands that this would catapult them to the moon.

I am finally getting a position on Nvidia. I should have one already, but it always seemed overpriced to me. At this point, why not.
Nvidia in Advanced Talks to Buy ARM, Upend Silicon Industry

Those rumors about Nvidia being in talks with SoftBank about purchasing ARM have been upgraded to “advanced talks.” (Does that make these “advanced rumors?”)
Even if SoftBank can come to an agreement with Nvidia over selling ARM, which it bought for $32B, the regulatory scrutiny from various nations would be enormous, as Bloomberg reports. Apple, Qualcomm, AMD, and Intel all have architecture licenses from ARM, allowing them to design their own CPUs that are compatible with ARM’s instruction sets but that otherwise contain custom IP. Dozens more companies depend on ARM’s extensive hard-IP licenses for various CPU solutions. Given ARM’s ubiquitous position in smartphones, and its burgeoning presence in HPC and servers, everyone from Ampere to MediaTek is going to be concerned about ARM being owned by any single silicon company.
What’s the Advantage of Ownership?

In my previous story, I stated that buying ARM would give Nvidia an easy path to return to desktop and laptop computing with an integrated ARM/Nvidia SoC. What I should’ve addressed then — and didn’t — is how this would be different from Nvidia taking out an architectural license (which it already has), in the first place. After all, Nvidia already builds chips like Project Denver and its successor, Carmel, on an ARM architecture. Owning ARM doesn’t change that.
What owning ARM would do is give Nvidia control over how the entire ARM IP stack evolves in the future. If it wanted to pour development into ARM’s Neoverse server concept and develop new SIMD extensions that would speed its own HPC workloads, it could do so. Instead of being limited to an Nvidia-specific implementation, ARM could design said extensions directly into the standard.

There are other potential advantages for Nvidia as well. The company could design a low-level GPU as a replacement for ARM’s own efforts, then extend the IP across its core families as well, giving the GeForce brand significant reach across the mobile ecosystem.
Regulatory issues, however, could still scuttle the deal. Historically, Nvidia has always preferred a very closed development model. The company doesn’t license CUDA to anyone and it typically prefers to develop its own value-added software and hardware capabilities as opposed to creating cross-vendor ecosystems. So long as Nvidia is just one ARM licensee among many, this presents no problem. If Nvidia were to buy ARM itself, however, the numerous firms that rely on ARM licenses would demand guarantees that their access to future products or licenses wouldn’t be impeded by anti-competitive measures. If the deal gets to this point, Nvidia will undoubtedly make a number of concessions and guarantees to avoid the appearance of favoritism.

What Nvidia would be buying, with ARM, isn’t just the ability to take out an architectural license. It has one already. What it would be buying, ultimately, is the ability to influence how ARM SoCs evolve in the future at multiple price points and markets. If Nvidia thought it would be useful to their own position to implement CUDA for mobile GPUs, they’d be able to do so. If they wanted to introduce a high-end hard-IP GPU core under the GeForce brand and position the SoC as a gaming solution, they could do that as well.

Just How Shelved Is AMD K12?

One thing I’d love to know is just how far AMD got with K12 before they shelved it and whether the chip might ever see the light of day. According to AMD contacts I spoke to when the company decided to pivot towards Ryzen, the K12 design wasn’t scrapped — AMD just decided that the ecosystem wasn’t mature enough to justify bringing the product to market. The scuttlebutt around K12 always suggested it was similar to Ryzen, with a number of shared design elements between the cores. While ARM and x86 are two different CPU architectures, it would be much easier to cross-leverage IP between ARM and x86 then between, say, x86 and Itanium. There’s no evidence that AMD finished the design or continued to evolve it in the background, but they wouldn’t have thrown the chip away, either. If ARM starts chewing into x86’s market share, I expect AMD might dust off K12, update it for the modern era, and bring it to market.

Right now, the CPU market is more dynamic than it’s been in decades. A new ARM owner could send major ripples through the company’s long-term trajectory. Intel is struggling with manufacturing issues. AMD is gaining market share. Heck, even open-source efforts like RISC-V continue to drive engagement and interest. Any Nvidia effort to buy ARM can likely be read as an intention to push into x86’s turf in one market or another.



Eh, probably bad for ARM in the long-term if it goes through.

Probably yes. Nvidia has a history of holding their cards tight and being very hostile towards open-source stuff in general. And ARM pretty much relies on their openness in order for CPU manufacturers to actually optimize their products.

Also considering how much Qualcomm relies on ARM, i'm kinda surprised if they would just stand by for this kind of thing.
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Currently Gif and Meme Champion
That's weird, because I though nVidia is going to use open source RISC-V...


From a shareholder perspective, this is great.

As a consumer, I think Nvidia is going to fuck up the flexibility of ARM and price gouge CPUs.

I do think there will be some nice high spec offerings, ARM CPU + Nvidia GPU goodness.

But I also feel Nvidia will basically price gouge the low end stuff, if not also destroy the openness of ARM.

Thinking of the Tegra, Nvidia might put out class leading generations, but should you want to build your own, I'm sure Nvidia is going to hold back the latest and greatest revision for their own chips, if you choose to design your own.
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From a shareholder perspective, this is great.

As a consumer, I think Nvidia is going to fuck up the flexibility of ARM and price gouge CPUs.

I do think there will be some nice high spec offerings, ARM CPU + Nvidia GPU goodness.

But I also feel Nvidia will basically price gouge the low end stuff, if not also destroy the openness of ARM.

Thinking of the Tegra, Nvidia might put out class leading generations, but should you want to build your own, I'm sure Nvidia is going to hold back the latest and greatest revision for their own chips, if you choose to design your own.
yeah, definitely a lot of antitrust issues that need to be ironed out. Maybe Qualcomm might even go back to fully designing their own chips instead of basing them on Cortex designs.
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ARM Becomes the Focal Point of a Growing Bidding War as TSMC and Foxconn Jump Into the Fray

SoftBank representatives have purportedly approached several key players in the tech space for a possible sale of the British chip designer. To date, NVIDIA , TSMC, Foxconn, Apple, Qualcomm, and Samsung have contemplated ARM’s acquisition. Some companies – including NVIDIA, TSMC, and Foxconn – have even received additional financial information in order to assist them in evaluating ARM’s prospects. However, as per the recent reports, Apple has stepped away from the negotiating table. Moreover, according to Reuters, Samsung has also declined to invest in ARM. This leaves NVIDIA at the forefront of the negotiating table, followed by TSMC and Foxconn.

For its part, NVIDIA is interested in buying the company in its entirety rather than purchasing a stake. It does make sense for NVIDIA to pursue a takeover of ARM. After all, SoftBank has been a major investor in NVIDIA, having amassed a $4 billion stake in 2017. Nonetheless, SoftBank’s gargantuan $100 billion Vision Fund disclosed in early 2019 that the entirety of its NVIDIA stake had been liquidated. Should TSMC succeed in acquiring ARM, it would enjoy significant synergies as both are longstanding partners. As far as Foxconn is concerned, ARM’s acquisition will allow the key iPhone supplier to diversify revenue sources and tap significant growth potential. This is all the more important as Foxconn witnessed its third consecutive decline in annual net profit in 2019.

If ARM were to be purchased, it would constitute one of the chip industry’s largest acquisitions. However, any potential deal will not be a walk in the park. Along with the usual hurdles associated with a deal of such magnitude, regulatory glare may prove to be a stumbling block. Finally, the chip designer's existing customers may try to block the acquisition or demand assurances regarding equal access to ARM’s technology. For SoftBank, an outright sale of ARM is just one option. The Japanese tech giant is also exploring the possibility of relisting the chip designer by next year. It may also resort to selling a stake in ARM to significant bidders or a consortium of investors. Either way, SoftBank is likely to retain a residual interest in the company even after its sale or flotation.


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Though I'd just leave this here, while I read it myself.

What would the union of ARM and Nvidia mean for the mobile industry?
Softbank’s $32 billion takeover of Arm in 2016 was lamented by many within the British technology industry.

While politicians sought to present the deal as evidence of the UK’s industrial prowess and evidence that Brexit wasn’t the doomsday scenario that many feared, others felt the country’s best chance of creating a homegrown international tech giant had been lost. That Brexit had weakened the pound and therefore made ARM an easier target added insult to injury. One silver lining was that Softbank committed to not only keeping ARM’s research and development in Cambridge but also to expand the workforce. Softbank’s motivation for the deal was a belief that ARM’s technology would be critical in powering the Internet of Things (IoT). Four years on and things are a little different. Softbank is under pressure after a number of failed investments – most notably WeWork – and has used sales of more blue-chip stakes to help ease the balance sheet.
Softbank and ARM
It is thought ARM could be next, with Softbank either re-floating the company or selling it. This has led to speculation Nvidia could be interested – a move which would be controversial given that ARM’s business model is based on licensing its designs to any vendor. Nvidia would in theory have the potential to adjust technical roadmaps to suit its own needs, potentially strengthening its portfolio. However to favour one organisation over another would be to the detriment of Arm's other customers. While there is no denying Nvidia could afford the touted $35 billion price tag being touted, it is suggested the value of Arm would immediately be lowered should it fall into the hands of a vendor.Neither party has commented on the rumours but some analysts are sceptical about the logic behind such an acquisition. In any case, the transaction would have difficulty gaining regulatory approval and could take years to resolve – destabilising the entire Arm ecosystem.
A separate report claimed Apple was approached to discuss a potential takeover but was not interested. Geoff Blaber from CCS Insight says the value of Arm is in its independence and that any move by Nvidia could cause other vendors to seek an alternative – such as the open source RISC-V “In reality, Arm is a licensing business,” he explained. “Although it could put Nvidia in a powerful position of control, some $35 billion would be a steep price to pay, and licensing alone offers little synergy. Nvidia could license Arm technology and build its own CPU cores, or partner to do so without acquiring Arm. “A lot of stories have been written about whether Nvidia should or shouldn’t acquire Arm. I firmly believe that such a move would be detrimental to Arm and its ecosystem, and would not be good news for the industry if it were allowed to proceed.”

A possible flotation?
Hermann Hauser co-founded Arm back in 1990 and he too has reservations about the deal. He told the BBC that he was increasingly concerned that such a takeover was likely and that should Arm fall into Nvidia’s hands, it would be a "disaster". Hauser also opposed the sale to Softbank but says that at least the Japanese firm has kept its commitment to invest in Cambridge. He fears that under Nvidia, decisions would be made in the US and that other chip manufacturers would seek an alternative to Arm technology. His preference would be for Arm to become a UK-owned company once again and believes the government would do well to facilitate such a deal. While Hauser accepts that current circumstances mean public money is at a premium, he cites the willingness to invest in OneWeb as evidence that the government would intervene if there was a strategic incentive.
While the vast majority of the mobile industry would be concerned more about ecosystem and supply chain rather than reinforcing the UK’s position as a chip powerhouse, a flotation could be the best route forward. “The alternative, and by far the best option, is that Arm returns to public ownership,” concluded Blaber. “This would ensure its ongoing independence and that the company retains a management team that understands its value and priorities. Despite the speculation, I’m optimistic that this is the more likely option. Let’s hope that SoftBank ultimately pursues the IPO path for Arm.”

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