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Home News Nvidia to acquire chip designer ARM in deal worth $40 billion

Nvidia to acquire chip designer ARM in deal worth $40 billion

Nvidia has announced it will acquire chip designer ARM from current owner SoftBank in a cash and stock deal valued at $40 billion.

In a move that will give Nvidia a chance of powering past rivals such as Intel and AMD, the California-based company said it has some exciting plans in store, including the creation of a state-of-the-art ARM-powered A.I. supercomputer, the opening of training facilities for developers, and the launch of a startup incubator that will aim to attract world-class research talent.

Nvidia said it would execute these plans in the U.K. where ARM is headquartered and currently employs around half of its 6,000-strong workforce.

According to the terms of the agreement, the U.S. chipmaker will pay Japanese tech giant SoftBank $21.5 billion in stock and $12 billion in cash. SoftBank, which bought ARM for $32 billion in 2016, will also receive around $5 billion in cash or stock, dependent upon ARM’s financial performance. Nvidia will also provide ARM’s employees with $1.5 billion in stock.

Nvidia said the deal, which is subject to U.S. regulatory and antitrust reviews, will play an important role in helping it to advance its artificial intelligence (A.I.) computing ambitions.

“A.I. is the most powerful technology force of our time and has launched a new wave of computing,” Jensen Huang, founder and CEO of Nvidia, said in a release. “In the years ahead, trillions of computers running A.I. will create a new Internet-of-Things (IoT) that is thousands of times larger than today’s Internet-of-People. Our combination will create a company fabulously positioned for the age of A.I.”

Huang added: “Uniting Nvidia’s A.I. 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 A.I. computing to every corner of the globe.”

Commenting on the tie-up, ARM boss Simon Segars said the two companies “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.”

ARM, which is based in Cambridge about 40 miles north of London, was founded in 1990 before going on to become a leading semiconductor and software design company. It licenses its technology to chip makers, with its technology found in a huge number of products worldwide, among them smartphones, tablets, vehicles, and data centers.

After licensing the processor design, an ARM customer can then customize the architecture to suit its own needs. Licensees usually pay an initial fee, with ARM also collecting royalty payments on every chip that contains its technology. To date, 180 billion chips have been shipped by the company’s licensees.

For more on the significance of Nvidia’s acquisition of ARM, be sure to check out this piece on Digital Trends.

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