SoftBank nears deal to sell British chip designer arm to Nvidia

SoftBank is near a deal to sell the British chip designer Arm to Nvidia, two people briefed on the matter said Saturday, which would raise billions for the Japanese technology investor and create a powerhouse in the semiconductor industry.

The two sides are close to an agreement for a cash-and-stock transaction whose price could potentially be more than $40 billion, these people said. A deal could be announced within days, though these people cautioned that final details have yet to be ironed out, and the talks could still fall apart.

A transaction — which would be one of the biggest announced so far this year — could also raise concerns from antitrust regulators around the world and from customers of Arm’s chip designs, which drive the majority of the world’s smartphones.

Nvidia is one of the world’s biggest computer chip companies, specializing in powerful chips that are used for computer graphics, data centres, cars and artificial intelligence. As of Friday, its market value was more than $300 billion — nearly $100 billion above that of Intel, the longtime standard-bearer in chip technology — and its stock has been one of the best performers of any technology company this year.

Should the two sides strike a deal for Arm, it would net billions for SoftBank as it seeks to sell assets as part of a business turnaround. It had paid $32 billion for Arm in 2016, as an audacious bet by its chief, Masayoshi Son, on a global rise in internet-connected devices.

In announcing that deal, Son described the so-called Internet of Things as shaping up to be “the biggest paradigm shift in human history,” a phenomenon he was willing to bet big on. That explained the steep price it paid for Arm — 43 per cent higher than where Arm had traded the week before the deal.

Arm has an unusual business model: It doesn’t sell semiconductors itself, and instead supplies design information that other companies incorporate into chips, charging royalties on its specifications. Its customers include Apple, Samsung, Qualcomm and Huawei.