Reshaping the entire semiconductor landscape, NVIDIA has decided to acquire SoftBank Group-owned chip designer Arm in a transaction valued at $40 billion. This combination would create a premier computing company for the age of artificial intelligence. SoftBank will remain invested in Arm through its ownership stake in NVIDIA, which is expected to be under 10 per cent.

However, the deal would see high-level of scrutiny from regulators and pushbacks from rivals, as it would put a vital chip supplier to the whole technology industry in the control of a single player, NVIDIA. Note that Arm chips are an essential part of today’s smartphones, and not to forgot Apple moved its entire Mac line to Arm chips.

NVIDIA to acquire Chipmaker Arm

Going through the details of the deal, NVIDIA will pay to SoftBank a total of $21.5 billion in NVIDIA common stock and $12 billion in cash, which includes $2 billion payable at signing. Additionally, SoftBank could also be paid up to $5 billion in cash or common stock depending on the chip designer’s business performance. Also, Arm employees would get $1.5 billion in Nvidia shares.

Simon Segars and his team at Arm have built an extraordinary company that is contributing to nearly every technology market in the world. Uniting NVIDIA’s AI computing capabilities with the vast ecosystem of Arm’s CPU, we can advance computing from the cloud, smartphones, PCs, self-driving cars and robotics, to edge IoT, and expand AI computing to every corner of the globe,” said Jensen Huang, founder and CEO of NVIDIA.

This combination has tremendous benefits for both companies, our customers, and the industry. For Arm’s ecosystem, the combination will turbocharge Arm’s R&D capacity and expand its IP portfolio with NVIDIA’s world-leading GPU and AI technology,” he further added.

Arm headquarters will remain in Cambridge and the new owner NVIDIA will build a world-class AI research facility there. This facility will support developments in healthcare, life sciences, robotics, self-driving cars and other fields. It would also build a state-of-the-art AI supercomputer, powered by Arm CPUs.

Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm. This is a compelling combination that projects Arm, Cambridge and the U.K. to the forefront of some of the most exciting technological innovations of our time and is why SoftBank is excited to invest in Arm’s long-term success as a major shareholder in NVIDIA. We look forward to supporting the continued success of the combined business,” said Masayoshi Son, chairman and CEO of SBG.

The acquisition is scheduled to be completed in September 2021. NVIDIA will retain the name and strong brand identity of Arm and expand its base in Cambridge. Arm in the hands-on NVIDIA will continue to operate its open-licensing model.

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