Nvidia has announced the biggest,France most expensive semiconductor deal in history on Sunday, agreeing to purchase British company Arm Holdings from Japanese conglomerate SoftBank for $40 billion. SoftBank previously bought Arm for $32 billion in 2016 — its largest ever investment at the time, and one that seems to have paid off massively.
Under the deal, Nvidia will pay SoftBank $21.5 billion in Nvidia stock, $12 billion in cash, and $5 billion in either cash or stock provided Arm hits certain financial goals. Nvidia will also pay $1.5 billion inequity to Arm's employees.
"Our combination will create a company fabulously positioned for the age of AI," said Nvidia CEO Jensen Huang in a press release. "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."
Arm will be a division under Nvidia, with its headquarters remaining in Cambridge. Nvidia aims to turn it into a "world-class AI research facility," intending to build a new AI supercomputer powered by Arm CPUs in order to attract highly skilled researchers from around the world.
Forbes analyst Patrick Moorhead believes Nvidia's purchase of Arm is not only the "most important semiconductor deal ever," but also a perfect fit. Nvidia has been a leading GPU manufacturer for years, while Arm is a dominant force in the mobile CPU market. As such, the two businesses have great potential to compliment one another and become an absolute powerhouse in tech.
"Arm plays in areas that Nvidia does not or isn’t that successful, while Nvidia plays in many places Arm doesn’t or isn’t that successful," said Moorhead in a Forbesop-ed late Sunday.
Nvidia and Arm appear to be in accord concerning plans going forward, with Arm spokesperson Phil Hughes telling Mashable its R&D capabilities, existing plans, and presence in the UK will be strengthened by Nvidia's resources.
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"Arm and NVIDIA share a vision and passion that ubiquitous, energy-efficient computing will help address the world’s most pressing issues from climate change to healthcare, from agriculture to education," said Arm CEO Simon Segars in the press release. "By bringing together the technical strengths of our two companies we can accelerate our progress and create new solutions that will enable a global ecosystem of innovators."
SEE ALSO: Here's how you can pre-order Nvidia's GeForce RTX 30 Series GPUsSoftBank will still have some interest in Arm after the sale due to a smaller than 10 percent ownership stake in Nvidia. While SoftBank sold its entire 4.9 percent stake in Nvidia for over $3 billion in 2019, it reinvested $220 million in the American tech company this year. A spokesperson told Mashable this new deal will make SoftBank Nvidia's largest active shareholder.
It will be a while before the sale is completed, though. Nvidia expects it to be finalised in around a year and a half, before which regulatory approval from China, the EU, the UK, and the U.S. will need to be obtained.
Mashable has reached out to Nvidia for comment.
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