SoftBank is near a deal to sell the British chip designer Arm to Nvidia, two people briefed on the matter said on Saturday, in a deal that would raise billions for the Japanese technology investor and create a powerhouse in the semiconductor industry.
The two sides are near an agreement for a cash-and-stock transaction whose price could potentially be more than $40 billion, these people said. They cautioned that final details have yet to be ironed out, and the talks could still fall apart.
A transaction could also raise concerns from antitrust regulators around the world and from customers of Arm’s chip designs, which drive the majority of the world’s smartphones, including the iPhone.
Nvidia is one of the world’s biggest computer chip companies, specializing in powerful chips that are used for computer graphics, data centers, cars and artificial intelligence. As of Friday, its market value was more than $300 billion, and its stock has been one of the best performers of any technology company this year.
Should the two sides strike a deal for Arm, it would net billions for SoftBank as it seeks to sell assets as part of a business turnaround. It had paid $32 billion for Arm in 2016, as an audacious bet by its chief, Masayoshi Son, on a global rise in internet-connected devices.
In announcing that deal, Mr. Son described the so-called internet of things as shaping up to be “the biggest paradigm shift in human history.” That opportunity made the steep price tag — which was 43 percent higher than where Arm had traded the week before the deal — worth it, in SoftBank’s eyes.
The deal, and its ambitions, were par for the course for Mr. Son, who months later unveiled SoftBank’s $100 billion Vision Fund, which was tasked with buying stakes in promising start-ups across the tech landscape, from Uber to WeWork to a company that used robots to make pizzas.
But those bets have not quite played out the way he has expected.
The Vision Fund later drew criticism for paying top dollar for sometimes questionable start-ups, contributing to a nearly $13 billion annual loss for SoftBank in the fiscal year that ended March 31. (The conglomerate said that the Vision fund has since returned to profitability as of June.)
And Arm has not quite turned out to be the home run that SoftBank had expected, with relatively stagnant sales growth and an inability to take a significant share in the internet-of-things market.
Months ago, SoftBank began exploring a potential sale or initial public offering for Arm.
Representatives for SoftBank and Nvidia declined to comment on the talks, which were reported earlier by The Wall Street Journal.