Arm Eyes Acquisition of Ampere, Valued at $8B

According to sources familiar with the matter, SoftBank Group and its majority-owned subsidiary Arm are exploring a potential acquisition of Ampere Computing, a semiconductor design company backed by Oracle.

Anonymous insiders revealed that Arm has shown interest in acquiring Ampere, which has been exploring strategic options. However, negotiations could still fall through, and Ampere may ultimately be acquired by another company.

Ampere designs semiconductors based on Arm's technology, and in 2021, during a minority investment led by SoftBank, Ampere was valued at $8 billion. It is unclear what the company's current valuation is.

In September 2024, reports indicated that Ampere had been working with financial advisors to explore acquisition interest. The California-based company, headquartered in Santa Clara, is seeking a deal with a major player in the industry, signaling that the company believes an initial public offering (IPO) may not be a viable path forward.

Early investors in Ampere also include The Carlyle Group. This potential acquisition would join a wave of semiconductor companies looking to capitalize on the growing demand for artificial intelligence (AI)-driven technologies. Oracle, which holds a 29% stake in Ampere, revealed last year that it has the option to exercise future investment rights, potentially taking control of the chip manufacturer.

While Ampere stands to benefit from the ongoing AI boom, it faces intensifying competition. Several major technology companies are developing chips similar to Ampere's offerings. As the data center industry undergoes restructuring to prepare for the AI era, there is growing interest in the control of critical components. However, like its larger competitors Intel and AMD, Ampere must also contend with the shift in spending from central processing units (CPUs) to Nvidia's accelerator chips.

Ampere uses Arm's technology to manufacture processors for data center equipment. Arm itself is gradually transitioning from being a provider of basic standards and blueprints to a more complete chip manufacturer. Bringing Ampere engineers on board could provide Arm CEO Rene Haas with valuable expertise and momentum as the company moves further into this market. Many of these engineers previously worked in Intel's leading server chip division.

Ampere's founder and CEO, Renee James, a former Intel executive, had considered taking the company public. In April 2022, Ampere privately filed for an IPO at a time when chip demand was surging.

The potential sale of Ampere is part of a broader wave of semiconductor deals. According to compiled data, global chip company transactions more than doubled in 2024, reaching over $31 billion.