On Sunday, Nvidia announced the largest and most expensive semiconductor deal in history and agreed to buy Arm Holdings from the Japanese conglomerate SoftBank for $ 40 billion. SoftBank had already bought Arm for $ 32 billion in 2016 – the largest investment ever made and which seems to have paid off massively.
Under the contract, Nvidia SoftBank will pay $ 21.5 billion in Nvidia stock, $ 12 billion in cash, and $ 5 billion in cash or stock if Arm achieves certain financial goals. Nvidia will also pay $ 1.5 billion to Arm employees.
“Our combination will create a company that is well positioned for the age of AI,”
Arm will be a division under Nvidia, whose headquarters will remain in Cambridge. Nvidia wants to turn it into a “first-class AI research facility” that will build a new AI supercomputer with arm CPUs to attract highly qualified researchers from around the world.
Forbes Analyst Patrick Moorhead believes Nvidia’s purchase of Arm is not only “the most important semiconductor business of all time,” but it is 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 companies have great potential to complement each other and become an absolute powerhouse in technology.
“Arm plays in areas where Nvidia is not or not as successful, while Nvidia plays in many places where Arm is not or not as successful,” said Moorhead in one Forbes open late Sunday.
Nvidia and Arm seem to agree on future plans. Arm spokesman Phil Hughes told Mashable that Nvidia’s resources will strengthen its research and development capabilities, existing plans and presence in the UK.
I think we’ll look back on NVIDIA’s purchase of ARM as a tectonic shift in the history of computing.
– Scott D. Lowe (@otherscottlowe) September 14, 2020
“Arm and NVIDIA share a vision and passion that ubiquitous, energy-efficient computing will help address the world’s most pressing problems, from climate change to healthcare, from agriculture to education,” said Simon Segars, CEO of Arm, in the press release . “By bringing together the technical strengths of our two companies, we can accelerate our progress and create new solutions that enable a global ecosystem of innovators.”
SoftBank will continue to have some interest in Arm after the sale due to a less than 10 percent stake in Nvidia. While SoftBank sold its entire 4.9 percent stake in Nvidia for over $ 3 billion in 2019, it invested $ 220 million in the American technology company this year.
However, it will take a while for the sale to complete. Nvidia expects completion in about a year and a half before it needs to get regulatory approval from China, the EU, the UK and the US.
Mashable has approached Nvidia and SoftBank for comment.