Earlier this year, it was revealed Nvidia was considering buying Arm from SoftBank. Then last month, SoftBank confirmed that it was indeed considering selling the UK-based chipset designer, which it purchased for $32 billion back in 2016. Today, Nvidia has confirmed the deal, valued at a whopping $40 billion.
In a blog post, Nvidia stated that the transaction allows it to create the "premier computing company for the age of artificial intelligence". Nvidia has clarified that Arm will continue to operate its open-source licensing model with the company's IP to remain registered in the UK. The firm will also be looking to expand its presence in the UK by building a new global center of excellence in AI at Arm's Cambridge campus, and will invest in an Arm-powered AI supercomputer as well.
Jensen Huang, founder and CEO of NVIDIA, stated 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.
Simon Segars and his team at Arm have built an extraordinary company that is contributing to nearly every technology market in the world. 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.
This combination has tremendous benefits for both companies, our customers, and the industry. 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.
Regarding the financials surrounding the $40 billion deal, SoftBank will remain committed to Arm's long-term success with a 10% ownership stake in Nvidia. It will be paid $21.5 billion in Nvidia's common stock - which equates to 44.3 million shares -, $12 billion in cash, and up to $5 billion in earn-out construct. Arm employees will also receive $1.5 billion in equity. The transaction does not include Arm's IoT Services Group. SoftBank's undertakings with Arm, which were made as a part of its 2016 acquisition, are expected to be complete by September 2021.
As with any deal of this scale, this transaction is subject to regulatory approvals, and is expected to be finalized within the next 18 months.