SoftBank Group said on Monday (September 14) it has agreed to sell British chip designer Arm to Nvidia for as much as $40 billion dollars.
It's a major deal, set to reshape an industry that powers computers, smartphones and data centers.
It would also transform Nvidia into a tech power player because Arm is a vital supplier to Apple and other big names across the industry.
That prospect means the deal will face potential pushback from regulators and Nvidia's rivals.
Nvidia is known for its graphics chips that power video games, and has expanded into other markets including artificial intelligence and self-driving cars.
It will pay SoftBank $21.5 billion dollars in shares, and $12 billion in cash, including $2 billion on signing.
The sale marks an early exit for SoftBank, just four years after acquiring Arm for $32 billion dollars.
Arm licenses its technology and chip designs to companies like Qualcomm, Samsung and Apple.
Arm chips are planned for use in Apple's future Mac computers.
If the deal goes through, it would give Nvidia control of technology in a market that it currently doesn't play in; the booming business for data centers.
It would set it against competitors like Intel and AMD, since Arm has been developing technology to compete with their chips.
On the Softbank side, a source told Reuters that executives have been frustrated with SoftbankGroup's share performance and have held early stage talks about taking the Japanese technology group private.
Those talks could gain momentum following the Arm sale.
The Arm deal is still subject to approvals from regulators, including in Britain, the U.S and China.
It's likely to come under close scrutiny in China, where thousands of companies from Huawei to small startups use Arm technology.