NVIDIA set to acquire Arm for $40 billion

NVIDIA and SoftBank Group (SBG) have announced a definitive agreement under which NVIDIA will acquire Arm from SBG and the SoftBank Vision Fund, in a transaction valued at $40 billion through a combination of NVIDIA shares and cash. The transaction is expected to be immediately accretive to NVIDIA’s non-GAAP gross margin and non-GAAP earnings per share.

The acquisition will bring together NVIDIA’s AI computing platform with Arm’s vast ecosystem to create what has been described as the premier computing company for the age of artificial intelligence, accelerating innovation while expanding into large, high-growth markets. SoftBank will remain committed to Arm’s long-term success through its ownership stake in NVIDIA, expected to be under 10%.

“Our combination will create a company fabulously positioned for the age of AI,” said Jensen Huang, founder and CEO of NVIDIA. “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.”

NVIDIA intends to build on Arm’s R&D presence in the UK, establishing a new global centre of excellence in AI research at Arm’s Cambridge campus. It will invest in a state-of-the-art, Arm-powered AI supercomputer, training facilities for developers and a start-up incubator, which will attract world-class research talent and create a platform for innovation and industry partnerships in fields such as health care, robotics and self-driving cars.

“Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm,” said Masayoshi Son, Chairman and CEO of SBG. “This is a compelling combination that projects Arm, Cambridge and the UK to the forefront of some of the most exciting technological innovations of our time and is why SoftBank is excited to invest in Arm’s long-term success as a major shareholder in NVIDIA. We look forward to supporting the continued success of the combined business.”

As part of NVIDIA, Arm will continue to operate its open-licensing model while maintaining the global customer neutrality that has been foundational to its success. Arm partners will also benefit from both companies’ offerings, including NVIDIA’s numerous innovations.

“Arm and NVIDIA 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,” said Simon Segars, CEO of Arm. “Delivering on this vision requires new approaches to hardware and software and a long-term commitment to research and development. By bringing together the technical strengths of our two companies, we can accelerate our progress and create new solutions that will enable a global ecosystem of innovators. My management team and I are excited to be joining NVIDIA so we can write this next chapter together.”

The proposed transaction is subject to customary closing conditions, including the receipt of regulatory approvals for the UK, China, the European Union and the United States. Completion of the transaction is expected to take place in approximately 18 months.

Image credit: ©stock.adobe.com/au/CoreDESIGN

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