Nvidia is eyeing to acquire Softbank Group Corp’s Arm Ltd. The company has reportedly proposed $40 billion to switch Arm Ltd from Softbank.
Arm is a neutral supplier of chip design technology. In 2016, SoftBank bought Arm for $32 billion.
Softbank had predicted a surge in internet-of-things (IoT) chips would bring a stream of revenue to Arm. Unfortunately, the prediction didn’t turn into reality. To survive, Arm soon raised prices for some of its technologies, putting rage on some customers.
Arm Ltd itself has been looming over the plan to go public.
Through a blog post, Arm CEO Simor Segars wrote, “We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast and innovate”.
In comparison to going public, Nvidia’s deal might benefit Arm Ltd better. Additionally, Nvidia promised to better support the creation of UK technology jobs.
“Combining with Nvidia will give us the scale, resources and agility needed to maximize the opportunities ahead,” the blog post continued.
Not only Nvidia, Qualcomm also shows interest in Arm
Nvidia has announced its plan to take Arm from Softbank since last year. Queueing just behind Nvidia is Qualcomm.
Just last week, the CEO for Qualcomm, Cristiano Amon, told The Telegraph newspaper and other media outlets about the company’s interest in Arm. Amon said that Qualcomm is willing to invest in an initial public offering by Arm in case the Nvidia deal falls through.
Accordingly, Amon also told media outlets that Arm will be keeping its firm independent if it agrees to a joint ownership deal with certain industry peers.
Upon the reportage, however, Qualcomm remained silent.
Though, Qualcomm Inc argued that the acquisition of Arm to a chip company could limit Arm’s growth. It’s not impossible for Arm to shift its focus on technologies that benefit its owner rather than the broader industry, Qualcomm said.
Apparently, the acquisition deal also received regulatory scrutiny from the United States, United Kingdom and European Union, Reuters notes.
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