Nvidia Buys ARM for $40 Billion, Plans New AI Research Center

Ruben Fields
September 15, 2020

After weeks of rumours, Nvidia announced last night that it was ready to plop down $US40 ($55) billion to acquire Arm Limited, better known as that company that designs Arm architecture behind CPUs in practically every gadget you use on a day-to-day basis. Also, Nvidia will issue $1.5 billion in equity to Arm employees.

Shares in Nvidia rose over 5% in pre-market trade in NY.

Dr Hauser previously told the Cambridge Independent the potential sale of Arm Holdings to Nvidia would be a disaster for Cambridge and the United Kingdom, and would destroy its business model of neutrality, through which it licences its technology to any company - including those that would be considered Nvidia's rivals. "Someday, trillions of computers running AI will create a new internet - the internet-of-things - thousands of times bigger than today's internet-of-people".

It added that the deal would create "the premier computing company for the age of artificial intelligence" (AI). SoftBank owns three-quarters of Arm, and the Vision Fund, in which SoftBank has a big stake along with the sovereign-wealth funds of Saudi Arabia and Abu Dhabi, owns a quarter.

Under the terms of the deal, Santa Clara, California-based Nvidia will pay SoftBank $21.5 billion in stock and $12 billion in cash. SoftBank, the Japanese telecom company that bought Arm for $US31 ($43) billion in 2016, has been pummelled by the pandemic, and selling Arm is believed to be a bid to raise some moolah to offset that.

On the other hand, NVIDIA is looking forward to a boom in the industry, especially with its upcoming RTX 3000 series graphics card that was recently announced.

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Tudor Brown, Arm's former chief executive, said the deal "just doesn't work" if Arm was "owned by one of these heavyweights".

"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", Huang said.

Once the coronavirus pandemic has subsided, SoftBank might think of using its surplus money for further investments as well as more share buybacks, but until then the company is keeping ample cash on hand in case subsequent waves of infections occur, a person familiar with the company's strategy said.

Nvidia also pledged to keep ARM's open operating model, meaning customers would not be obliged to buy ARM-designed chips that are manufactured by Nvidia. The other group the canned quotes are directed at is Arm customers, who will understandably be alarmed by the prospect of it being owned by a competitor.

Huawei's Hisilicon chip unit used Arm designs to build its Kirin chips before Washington's trade restrictions on the Chinese company crippled the division, while Unisoc, a chipmaker owned by China's state-backed tech conglomerate Tsinghua Unigroup, counts on the company's blueprints.

"An acquisition by Nvidia would be detrimental to Arm and its ecosystem", he said. That's pretty much all I have to say. They've been in the processor business since the 1980s, and if you've used a computer in your life, you've likely used something from Arm.

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