ARM Eventually Ends Up in NVIDIA’s Hands in a $40 Billion Deal

By Bill Toulas / September 14, 2020

NVIDIA has announced that the deal to acquire ARM has gone through, and the cost of the acquisition has reached the astronomical figure of $40 billion. We had reported on the rumors about NVIDIA being the most promising among the various prospective suitors, and they had even submitted a proposal to ARM’s owner, SoftBank, back in July.

SoftBank had purchased ARM in 2016 for $32 billion, so in bulk, they’ve made eight billion USD from this deal. They had already evaluated ARM at $41 billion, so the final agreement is close to what was expected.

According to NVIDIA’s announcement, their immediate plans include an expansion of Arm’s R&D presence in Cambridge, UK, through the establishment of a state-of-the-art AI research center. The chip designer’s headquarters will remain there, and a research hub that will attract more researchers and scientists will be created there. NVIDIA is betting hugely in artificial intelligence, and they hope that, with the help of Arm, they will finally be able to tap onto realms of AI supercomputing.

Jensen Huang, founder and CEO of NVIDIA, has made the following statement on the firm’s focus on AI technology:

AI is the most powerful technology force of our time and has launched a new wave of computing. In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today’s internet-of-people. Our combination will create a company fabulously positioned for the age of AI.

As for Arm’s licensing portfolio, whose incompatibility with Apple’s business was the reason why the Cupertino company passed SoftBank’s calls, NVIDIA has assured the world that nothing will change. The open-licensing model and customer neutrality will remain unchanged, and some expansion that will include NVIDIA’s technology is also to be expected.

From its side, SoftBank said that NVIDIA is the perfect partner for Arm and that their selection was based on securing the chip expert’s long-term success, and not just finding someone holding the assets to cover the deal requirements. Moreover, SoftBank will maintain an ownership stake in NVIDIA, which is expected to be under 10%, but still significant in terms of having an involvement in helping drive Arm’s step to the future with confidence. Finally, $1.5 billion will be issued to Arm employees as equity.

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