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Nvidia tried and failed to buy Arm for $40 billion in 2020, but it just reported a stake worth $147.3 million

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Nvidia Corp., the chipmaker at the heart of an artificial intelligence spending boom, disclosed investments in Arm Holdings Plc, SoundHound AI Inc. and the biotech company Recursion Pharmaceuticals Inc.

Nvidia included the information in a 13F form filed with the US Securities and Exchange Commission on Wednesday, giving a glimpse at the closely watched company’s investment strategy. It has a history with Arm, which Nvidia attempted to acquire for $40 billion in 2020. That deal ultimately crumbled under regulatory pressure, and Nvidia walked away in February 2022.

The SoundHound investment, meanwhile, was taken as a bullish sign by that company’s investors. Its shares soared as much as 55% in late trading Wednesday after the stake was disclosed. SoundHound makes AI software for audio recognition. Nvidia was cited as a SoundHound investor in 2017. 

The Arm stake was the largest in dollar terms, amounting to $147.3 million. The Recursion holding was valued at $76 million, and the SoundHound stake was $3.67 million. Nvidia also disclosed smaller holdings in medical imaging developer Nano-X Imaging Ltd. and the self-driving company TuSimple Holdings Inc.

Following the failed Nvidia takeover, Arm became the biggest initial public offering of 2023. It remains majority-owned by SoftBank Group Corp., which acquired the chip designer in 2016 for $32 billion. SoftBank has benefited from a dramatic rally in Arm shares this year. The stock is up by more than two-thirds, increasing its market valuation to nearly $130 billion.

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