Bloomberg News reported Friday, citing sources, that Nvidia is the only company looking to purchase Arm and that the two sides could reach a deal within the next few week.
SoftBank paid $31.4 billion for Arm in 2016.
A deal between the two companies could be the largest ever in the semiconductor industry. The chip industry has been consolidating in recent years.
SoftBank has been offloading some of its biggest assets to pay down the Japanese investment fund's debt, including part of its stake in Alibaba (BABA) - Get Report and some of its holdings in wireless company T-Mobile (TMUS) - Get Report.
SoftBank has been exploring options to offload all or part of its stake in Arm through a sale or a public stock listing, Bloomberg reported. A public listing for Arm could happen as soon as next year if SoftBank can't make a deal for the company.
Arm sells semiconductor designs and also licenses the fundamentals of how chips communicate with software, known as instruction sets. Even some companies that design their own chips, such as Apple, (AAPL) - Get Report do so using Arm’s instruction set.
Earlier this month, Nvidia's market cap surpassed that of chip giant Intel (INTC) - Get Report for the first time, amid positive sentiment about the graphics chipmaker. Both chipmakers are based in Santa Clara, Calif.
Nvidia was upgraded at Cowen two weeks ago with the firm affirming its outperform rating while raising its price target to $475 from $410.
Nvidia shares at last check were down 0.9% to $420.62.