NVIDIA to acquire Arm Holdings for $40 billion from SoftBank

SoftBank Nears Deal to Sell Arm to Nvidia

SoftBank Nears Deal to Sell Arm to Nvidia

The much-watched Softbank's sale of its chip design company ARM confirmed the buyer on Monday.

Nvidia will also issue $1.5bn in equity to ARM's employees.

NVIDIA will be buying Arm Holdings from the SoftBank Group as per a recent announcement. Arm Cambridge will be a world-class technology center. Nvidia CEO Jensen Huang has been quoted by both Bloomberg and the New York Times as stating a major priority will be expanding Arm chips for networking and cloud computing - an area that Intel has a 90% share in. "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". This means the UK-based chip giant's vast computing ecosystem will merge with NVIDIA's leadership in artificial intelligence (AI) to drive innovation for all customers and create "a premier computing company for the age of AI".

The head of Nvidia Corp. vowed to invest in Britain with more jobs and R&D as part of its US$40-billion purchase of chip designer Arm that has sparked concerns about Arm's independence and future in the country. Nvidia is planning to build an AI research facility for facilitating developments in healthcare, life sciences, robotics, self-driving cars, among other fields. SoftBank will remain committed to Arm's long-term success through its ownership stake in NVIDIA, expected to be under 10 percent.

The deal will have NVIDIA paying 12 billion US Dollars in cash, which includes 2 billion US Dollars payable at signing, and giving out 21.5 billion US Dollars worth of NVIDIA's stock to SoftBank. 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. Some of those trades, involving the purchase of options that confer the right to buy stocks at a later date, have been so big that they contributed to a surge in USA markets. And Arm will continue to be based on Cambridge, UK.

And if the deal does pass muster with regulators, will chip makers that are now licensing Arm designs look elsewhere? It will "continue to operate its open-licensing model while maintaining its global customer neutrality", the company said.

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In April, Nvidia completed the acquisition of Israel's Mellanox Technologies Ltd. for $7 billion.

Nvidia CEO Jensen Huang said the USA company still plans to keep Arm based at its headquarters in Cambridge, England, where it will also build an artificial intelligence research center.

The boards of directors of Softbank, Nvdia and ARM have already approved the takeover, but regulatory approval is still pending in the US, China, UK and the EU. I'd not be surprised if the deal is killed sometimes in 2021, as we've seen in the past with Qualcomm trying to acquire NXP.

He called on the United Kingdom government to put three conditions on the deal: a guarantee of jobs in Britain; a promise to preserve Arm's open business model; and an exception to U.S. security reviews on its client relationships.

Nvidia is also one of ARM's clients, using its designs to create its line-up of Tegra computer processing units (CPUs).

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