Nvidia-Arm $40 Billion Deal Will Upend Entire Chip Industry

Nvidia and SoftBank have reached an agreement to acquire Arm to Nvidia for $ 40 billion. Nvidia wants to use Arm’s technology to improve its position in the market for systems around artificial intelligence.

Nvidia-Arm $40 Billion

Nvidia and Arm report that the agreement with the Japanese Softbank Group has been concluded. Nvidia promises that Arm will maintain its open licensing model and neutral stance towards customers. Arm licenses his chip designs to customers, who can base their chips on them. According to Nvidia, those customers will soon be able to benefit from innovations from Nvidia.

According to Jensen Huang, founder and CEO of Nvidia, the acquisition enables the expansion of the use of artificial intelligence in multiple areas: cloud, smartphones, PCs, self-driving cars and robots, to edge internet of things and AI computing to every corner of the world.”

Arm’s headquarters will remain located in Cambridge, UK, and Nvidia wants to expand that location with an artificial intelligence research center for healthcare, life sciences, robotics and autonomous vehicles, among others. Nvidia also wants to build a supercomputer with Arm CPUs.

Nvidia will pay SoftBank $ 21.5 billion in stock and $ 12 billion directly. If Arm achieves certain positive results, SoftBank will get an additional $ 5 billion. In addition, Nvidia pays $ 1.5 billion in Nvidia stock to Arm employees. The total purchase amount of $ 40 billion is more than the $ 31.4 billion that SoftBank paid for Arm in 2016. Incidentally, SoftBank still retains a small part of Arm, but that is less than ten percent.

The acquisition has yet to be approved by competition authorities in the United Kingdom, China, Europe and the US. Nvidia, Arm and SoftBank expect it to take eighteen months for the transaction to be completed.