Arm is reportedly interested in acquiring Ampere, the server-focused semiconductor company founded by former Intel President Renée James.

Ampere’s chips are based on Arm designs and have made significant inroads in the server market, thanks to the power and energy efficiency Arm-based chips provide. According to a report by Bloomberg, via Tom’s Hardware, Arm is considering purchasing Ampere in an effort to improve its data center presence.

As Tom’s Hardware points out, such an acquisition could upset the balance in the Arm ecosystem. The company has long been known as the Switzerland of the semiconductor industry, licensing its designs to any company willing to pay, while not making any chips of its own. Purchasing a company that makes and sells chips could lead to Arm licensees crying foul, especially if Arm plays favorites and reserves its best tech for the Ampere line.

Oracle could also prove to be a major obstacle to any deal with Arm. Oracle has gone all-in on Ampere, migrating its Oracle cloud Infrastructure (OCI) to Ampere CPUs. Even more telling, a proxy statement in late 2024 revealed that Oracle currently owns 29% of Ampere, with the company having the option to become majority owner in 2027.

We also own convertible debt investments in Ampere which, under the terms of an agreement with Ampere and other co-investors, will mature in June 2026 and are convertible into equity securities at the holder’s option under certain circumstances. During the fiscal year ended May 31, 2024, we invested an aggregate of $600 million in convertible debt instruments issued by Ampere. In accordance with the terms of an agreement with other co-investors, we are also a counterparty to certain put (exercisable by a co-investor) and call (exercisable by Oracle) options at prices of approximately $400 million to $1.5 billion, respectively, to acquire additional equity interests in Ampere from our co-investors through January 2027. If either of such options is exercised by us or our co-investors, we would obtain control of Ampere and consolidate its results with our results of operations.

If Arm is going to make a move on Ampere, the company will need to do so before Oracle exercises its options. Even then, Arm would still have to address Oracle’s current 29% ownership stake, a stake Oracle may not be interested in selling.