Nvidia Confirmed Its Acquisition Of ARM For $40 Billion


Graphics hardware and AI giant Nvidia confirmed a long-rumored news: its acquisition of Arm, the UK-based chip design company.

Nvidia said that it acquired Arm in a $40 billion transaction from SoftBank, aimed to be completed in the next 18 months, if it can pass regulatory scrutiny.

Following the acquisition, Arm, which designs processors for a wide range of consumer products including phones and laptops, will retain its headquarters in Cambridge, UK. But Nvidia will invest the company to add an AI-focused research and development center.

The goal for Arm is to not only develop chips for the aforementioned products, but to also allow Nvidia "build a state-of-the-art AI supercomputer, powered by Arm CPUs."

Literally, Nvidia wants to bring computing for AI, down from the cloud to individual devices.

Arm - Nvidia

Jensen Huang, the company’s CEO, said on a blog post that:

"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."

"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."

"…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."

With the deal, Nvidia wants to further strengthen its AI computing platform business to reach more devices and applications, while at the same time, help reshape the global semiconductor industry.

For this to happen, Nvidia pays $12 billion in cash and $21.5 billion in sales.

SoftBank and its $100 billion Vision Fund are getting a stake of between 6.7% and 8.1% in Nvidia.

Arm - Nvidia
Jensen Huang, the Taiwanese-American billionaire businessman and electrical engineer, the co-founder and CEO of Nvidia.

Arm was acquired by SoftBank in 2016 for $31 billion.

The British company’s products power many processors inside devices by companies like Apple, Samsung, and Qualcomm.

Arm is said to have increased in value, following SoftBank's acquisition, with the increased of demand on GPUs. What's more, Microsoft is also making an Arm-based Surface and a version of Windows for Arm, and Apple is planning to develop future Macs with Arm-based chips.

Nvidia at the meantime, is the leading maker of GPUs.

Nvidia once had big plans to develop CPUs for phones but experienced little success. But this Arm acquisition can change that, especially because both Nvidia and Arm see opportunities for growth in enabling AI software that can run on Arm’s chips from those on products as small as smartphones to as huge as servers.

Huang said that Nvidia is spending a lot of money for this acquisition to happen. And for that, it has no plan to do anything with Arm that would cause its clients to walk away.

Arm will “continue to operate its open-licensing model, while maintaining its global customer neutrality,” Nvidia said.

This acquisition shows how successful Nvidia has become in the recent years, with the booming in areas like GPUs, self-driving autonomous cars, as well as AI.