Arm to Acquire DreamBig for $265M

Recently, SoftBank-backed chip design giant Arm announced plans to acquire all outstanding shares of startup DreamBig Semiconductor for $265 million in cash, aiming to expand its footprint in data center and networking technologies. The deal is expected to close by the end of Arm's FY2026 Q4, around late March next year.

Founded in 2019 by Sohail Syed in San Jose, California, DreamBig Semiconductor specializes in high-performance chips for data centers, particularly hardware optimized for AI workloads. Syed, previously a senior engineering director at Marvell Semiconductor, also founded the chip startup FIRQuest, which was acquired by Corigine in 2019.

In January, DreamBig launched the Mercury AI-SuperNIC, a network card designed to connect GPUs with "unmatched efficiency." The accelerator features a Remote Direct Memory Access (RDMA) engine, supports RoCE v2 and UEC standards, and delivers 800 Gb/s bandwidth and 800 Mpps throughput, enabling dense AI processing workloads. According to DreamBig, the single-chip design connects GPUs and tensor processing units (TPUs), while compatible chipsets can provide integrated network connectivity up to 12.8 Tb/s for AI superchips.

DreamBig has also collaborated with Samsung Foundry, leveraging its SF4X FinFET advanced packaging technology to bring hardware to market. Industry veteran Steve Mejes, formerly Intel engineering director, has joined DreamBig as Senior Vice President of Engineering.

Arm's latest financial report showed strong growth, with FY2026 Q2 revenue reaching $1.14 billion, surpassing expectations and up from $844 million in the same quarter last year. Since 2021, demand for Arm's data center chips has grown 14-fold, with more than 70,000 customers, and licensing revenue has doubled year-on-year.

This acquisition marks a significant move for Arm following the failed NVIDIA acquisition attempt, riding the wave of AI-driven growth. While Arm has not disclosed detailed plans, industry observers speculate that DreamBig's technology could be licensed to major players such as NVIDIA or Broadcom.

Earlier this year, Arm also reached an agreement with the Malaysian government to establish a presence there, targeting a market with rapidly growing investment in semiconductor design and manufacturing. Malaysia's strategy, unveiled in April 2024, aims to create Southeast Asia's largest integrated circuit design hub.