According to reports on Saturday, the US chipmaker Nvidia is close to buying British competitor Arm for $40 billion from the current owner SoftBank, which would create a giant in the chip industry.

Although, Arm is not a chipmaker, It licenses its chip designs to different technology company, including Apple, Samsung, and Intel. Its licensees ship billions of chips for everything, including phones, tablets, and internet-of-things sensors. Nvidia, however, is known for its graphics chips that power video games, but it has developed other markets including artificial intelligence, self-driving cars and data centers.

Arms which is a British firm has once collaborated with Nvidia to make chips since it can not perform the duty on its own. Last year Nvidia said it would make its chips work with processors from Arm to build supercomputers, deepening its push into systems that are used for modeling both climate change predictions and nuclear weapons.

Nvidia close deal on Arm

Who is Gaining More in This Deal?

This deal will be a great benefit to SoftBank who has bought the company for four years now for $38 billion, to expand into the internet-of-things technology, which connects everyday devices from traffic signals to refrigerators to the internet. However, the company has been struggled to jump-start growth in the business, according to the Wall Street Journal, which reported on the deal earlier.

Similarly, according to Financial Times reported, the executives are considering taking the Japanese technology group private as the company seeks a new strategy after disposing of several large assets. The talks on taking SoftBank private have been speeded up due to number of fundamental changes to SoftBank’s business strategy to become a long-term investor in businesses rather than a manager of companies, according to the FT. Although, a SoftBank spokeswoman declined to comment on the FT report when contacted by Reuters.

However, SoftBank’s recent investment track record has been checkered, including a particularly large bet on the prospects of shared office provider WeWork, resulting in SoftBank reporting an $18 billion loss at the Vision Fund in May, pushing the conglomerate to a record loss.

According to a Business Insider analyst in July, a tie-up between Nvidia and Arm could prompt regulatory scrutiny, since the UK firm’s licensees include some of Nvidia’s direct rivals.

“If Nvidia were to buy it, they would gain significant power in the marketplace,” IDC President Crawford Del Prete said at the time. “Nvidia gains the ability to control the source code of Arm, arguably the most popular CPU [computer processing unit] architecture on the planet in terms of volume.”

Reuter has requests for comments on this report, however, neither Nvidia, nor SoftBank and Arm grant their request.

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