Nvidia plans to acquire Cambridge-based Arm in a $40bn deal

Nvidia nears deal to buy chip designer Arm for more than $40 billion sources say

Nvidia nears deal to buy chip designer Arm for more than $40 billion sources say

Nvidia is making history with its latest acquisition of chipmaker Arm, as the $40 billion (approximately £31 billion) agreement is the largest semiconductor deal ever.

SoftBank and the Vision Fund will end up with a stake of between 6.7% and 8.1% stake in Nvidia.

Latham & Watkins acted as legal adviser to NVIDIA on the transaction, which will integrate NVIDIA's artificial intelligence (AI) computing platform with Arm's own software network, to create a prominent software company with strong AI capabilities. Arm is a semiconductor and software design company, which is now owned by the Japanese conglomerate SoftBank.

Jensen Huang, CEO of Nvidia, told a press conference on Monday that his company would not change Arm's licensing business model and was willing to expand the licensing to even Nvidia's own technologies.

SoftBank said it felt Arm would perform better in combination with NVIDIA and the sale would "contribute to an increase in our company's value for shareholders".

"Simon Segars and his team at Arm have built an extraordinary company that is contributing to almost every technology market in the world".

"By drawing on Arm's huge pool of active devices, as well as its technical knowhow, NVIDIA's hoping it can crack a technology with potential applications in cloud, smartphones, PCs, self-driving cars, robotics and the Internet of Things", Hyett said.

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Arm's cofounder Hermann Hauser, who is no longer with the company, has warned that thousands of staff in the United Kingdom will lose their jobs because of the deal. Arm's low-powered CPU designs are well suited to being paired with Nvidia's technology in this setting, and positions Nvidia well for continued growth across healthcare, robotics, self-driving cars and other emerging industries. "Arm Cambridge will be a world-class technology center".

ARM's large semiconductor customers such as Qualcomm, Samsung and NXP have been notable by their lack of comments, but ARM is quick to point out that partners had been involved in the discussions.

Performance chip maker Nvidia wants to buy chip designer Arm, but with many of Nvidia's direct competitors also Arm customers it's hard to see how the deal could be approved. "We look forward to supporting the continued success of the combined business". "My management team and I are excited to be joining NVIDIA so we can write this next chapter together". "Arm Cambridge will be a world-class technology centre".

The U.K. has the ability to intervene in deals over factors such as national security.

When the acquisition of Arm is complete, Nvidia plans to invest in the English company's R&D efforts in Cambridge, promising the construction of a new supercomputer.

Coming back to the acquisition, the deal, which is settled at $40 billion, will involve Nvidia paying a combination of $21.5 billion in stock and $12 billion in cash, to Softbank.

Buybacks have been a major driver for SoftBank's shares, which climbed 160% from March lows to peak on August 3 when they closed at 6,932 yen.

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