Nvidia acquires ARM for a whopping $40 billion

Nvidia has announced that it has purchased Arm from SoftBank for a whopping $40 billion.

ARM is a semiconductor and software company, based out of the UK, owned previously by Japan’s SoftBank. ARM has been in the processor business since the 1980s, and nowadays most smartphones, tablets as well as some latops use ARM processors .

According to the terms, Nvidia has to pay SoftBank $12 billion in cash, $21.5 billion in stocks, and another $5 billion is placed under an earn-out clause.

Interestingly. Nvidia is not purchasing the IoT services part of ARM.

Nvidia founder and CEO Jensen Huang responded by saying  “Simon Segars and his team at ARM have built an extraordinary company that is contributing to nearly every technology market in the world.”

As to what their objectives are Huang said: “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.”

According to Huang, ARM  would continue to operate in Cambridge, and Nvidia would issue equity of $1.5 billion for ARM employees. He said “ARM’s business model is brilliant. We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand ARM’s IP licensing portfolio,” Haung also stated, “Nvidia will retain the name and strong brand identity of ARM.”

Meanwhile, Arm CO-founder Hermann Hauser described the takeover to be an “absolute disaster”. He also mentioned that it would destroy ARM’s business model and leave several employees at its Cambridge headquarters and elsewhere jobless.

Even though the deal has been completed regulatory approval in the UK, China, US, and EU is still necessary.

Amidst all speculations about Nvidia deal being an Anti-Trust move, Huang replied that ARM was never a competition for Nvidia since both the companies were “completely complementary”.

“Nvidia doesn’t design CPUs, we have no CPU instruction set, Nvidia doesn’t license IP to semiconductor companies, so, and in that way, we’re not competitors. We have every intention to add more IP tools and also unlike Arm, Nvidia does not participate in the cell phone market,” he said, supporting his point.

He further added “Our intention is to combine the engineering and the tech — the R&D capacity of both companies so that we can accelerate the development of technology for Arm’s vast ecosystem, and one of the areas … that we very interested in, is to accelerate the development of server CPUs.”

For more updates stay tunes at Tech2Stop

Also Read | How to Build a PC | In-Depth Guide (2020)

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