Nvidia reportedly in talks to be an anchor investor in Arm

Nvidia is reportedly in talks to invest in chipmaker Arm as part of a group of initial anchor investors, according to an article by Financial Times. Regulators previously barred Nvidia from acquiring Arm.

Video transcript

- There's a big discussion now and big implications for what's going to happen with tech dealmaking. There's one deal that got rejected last year. Nvidia was trying to buy Arm. Now, according to the Financial Times, Nvidia is reportedly holding talks with Arm, the British chip designer, to perhaps be an anchor investor on Arm's IPO.

Arm now controlled by SoftBank, which has been planning to spin it out in an IPO. And there's now this talk of anchor investors who might take a big stake in the company as part of that initial public offering. And it is interesting given Nvidia's history here of trying to outright buy Arm, and then getting rejected by regulators.

- Yeah, and there's a long history of companies who if they don't feel like there's a pathway for them to be able to acquire a company, to have that type of either anchor position or some type of outsized shareholder or stakeholder position in a company that's getting ready to go public, even if they do play in the same space. I think back to when Trivago went public even, Expedia was one of the major shareholders in that company at the time of their IPO.

You can look at some of the other examples, especially within the ERP landscape where there have been either early angel investments-- I think back to none other than salesforce.com. When they went public, of course Marc Benioff, given his position that he had had previously at Oracle and the relationship with Larry Ellison, Larry Ellison was a major investor in Salesforce, as well. And so there are all these different examples, and this could perhaps be one of the latest where in the face of regulators pushing back on a deal being able to go through where there would be a stakeholder position that's taken on in the advancement of an IPO as well, and entry into the public market.

- I should mention, I reached out to Nvidia for a comment and did not hear back. Just one other quick note about the Financial Times report is that at the amount in which Nvidia would invest, it would value Arm at $35 billion to $40 billion, which $40 billion is originally what it was going to buy the company overall for. SoftBank was hoping for a valuation of about double that. So we'll see what ends up happening.

- We will indeed.