Why Nvidia Just Dumped All Its ARM Holdings

$155.8 million. That's what Nvidia's remaining stake in ARM Holdings was worth at the end of Q3 2024. By Tuesday's SEC filing, that stake had vanished entirely. The chip giant that once tried to buy ARM for $40 billion has now severed all financial ties with the company.

From $40B Suitor to Silent Exit

The relationship began with grand ambitions. In 2020, Nvidia announced plans to acquire ARM from SoftBank for $40 billion, promising to create an AI powerhouse that would reshape computing. The deal made strategic sense: ARM's ubiquitous chip designs powering everything from smartphones to servers, combined with Nvidia's AI acceleration prowess.

But regulators on both sides of the Atlantic had other ideas. Concerns about market concentration killed the deal in 2022. Major tech companies including Apple, Google, Microsoft, and Amazon — all ARM customers — actively opposed the acquisition, fearing Nvidia would gain too much control over critical infrastructure.

Strategic Investor Turns Seller

After the acquisition collapsed, Nvidia joined ARM's $735 million strategic investor round during its 2023 Nasdaq debut. Alongside Apple, Google, Samsung, and TSMC, Nvidia positioned itself as a supportive partner rather than a would-be owner.

That partnership has now ended, at least financially. Nvidia held 1.1 million shares worth $155.8 million as of Q3 2024, but SEC documents show the position was completely liquidated by year-end.

The Timing Tells a Story

Nvidia's exit comes as ARM stock has surged 16% this year, reaching a market cap of approximately $135 billion. The company's latest quarterly results showed 26% year-over-year revenue growth to $1.24 billion, beating analyst expectations and demonstrating what Morgan Stanley called "AI project momentum."

So why sell now? Nvidia's decision suggests this wasn't about ARM's performance but about strategic priorities.

Business Ties Remain Strong

Despite divesting its equity stake, Nvidia maintains its 20-year licensing agreement with ARM. The company's Grace CPUs, described as "the foundation of next-generation data centers," are built on ARM architecture. CEO Jensen Huang previously stated Nvidia would "continue to support ARM as a proud licensee for decades to come."

This creates an interesting dynamic: Nvidia has eliminated potential conflicts of interest from owning ARM stock while preserving the technical relationship that powers its data center ambitions.

Broader Investment Strategy Shift

Nvidia's current portfolio reveals a more diversified approach. Beyond ARM, the company holds stakes in CoreWeave, Intel, Nebius, Nokia, and Synopsys. The $1 billion Nokia investment, announced in October, signals Nvidia's interest in telecommunications infrastructure for AI deployment.

This portfolio evolution reflects Nvidia's transformation from a graphics card company to an AI infrastructure investor, placing bets across the technology stack rather than concentrating on single relationships.