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SoftBank

SoftBank enters talks to sell Arm to Nvidia

Masayoshi Son's tech group weighs options for chip designer, including IPO

SoftBank Chairman Masayoshi Son speaks about the acquisition of Arm in July 2016. (Photo by Satoshi Hishida)

TOKYO -- SoftBank Group has entered into negotiations to sell British chip design unit Arm to Nvidia, Nikkei has learned.

The talks are still in the early stages and could ultimately fall apart. The Japanese company is believed to be weighing several different options for Arm, including spinning off the unit through an initial public offering.

SoftBank Group has been offloading assets to plug the damage from write-downs on its investments in WeWork and Uber Technologies.

If it decides to sell Arm, which holds a high market share in semiconductor design, the Japanese group may be forced to rethink its future strategy centered around artificial intelligence.

Shares in U.S.-based Nvidia have rallied this year, giving the company a market capitalization of $261 billion -- higher than that of longtime industry leader Intel. Its high-powered graphics processors are used in artificial intelligence applications as well as cryptocurrency mining.

Arm holds a global market share of more than 90% in core design architecture for mobile processors. This strength likely appeals to Nvidia, which appears to be weighing the acquisition as a means to improve its competitiveness.

The Japanese company bought the then-listed Arm for around $32 billion in 2016 and made it a wholly owned subsidiary. The acquisition was a long-held dream of SoftBank Group chief Masayoshi Son, who had been looking to relist the chip design house after raising its value.

SoftBank Group is pushing through a plan to unload up to 4.5 trillion yen ($42.5 billion) of assets to repay debt and fund stock repurchases. The group announced share sales for domestic telecommunications unit SoftBank Corp., as well as in American wireless company T-Mobile US.

Son said in late June that the company had reached 80% of its asset sale target.

SoftBank Group has already converted more than 3 trillion yen in assets into cash and appears likely to top 4.5 trillion yen in total.

The Financial Times earlier reported that Nvidia was in talks with SoftBank on buying Arm.

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