NVIDIA to Buy Arm for $40 Billion

Posted on September 14, 2020 by Paul Thurrott in Cloud, Hardware, Mobile with 12 Comments

NVIDIA announced that it will acquire Arm from SoftBank in a deal that is valued at $40 billion. The firm will pay $21.5 billion in stock, $12 billion in cash, and $2 billion at signing, and SoftBank could receive an additional $5 billion if Arm meets certain performance targets. Also, Nvidia will issue $1.5 billion in equity to Arm employees.

“We are joining arms with Arm to create the leading computing company for the age of AI,” NVIDIA founder and CEO Jensen Huang wrote in an open letter to employees last night. “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.”

I was of the mind that NVIDIA would be the ideal non-partisan suitor for Arm, which makes the reference designs for the chips that power virtually all mobile devices and, increasingly, many that end up in cloud computing data centers as well. But that’s even more true than I had imagined: NVIDIA won over critics by pledging to keep Arm as a separate company with open licensing, and it will honor SoftBank’s promises to keep Arm in Cambridge, England, it’s long-time home.

SoftBank had purchased Arm in 2016 for $32 billion, and Amazon, Apple, Huawei, Qualcomm, and Samsung are among its biggest licensees.

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Comments (12)

12 responses to “NVIDIA to Buy Arm for $40 Billion”

  1. Avatar

    crunchyfrog

    Well, this should make the stocks surge a bit today.

  2. Avatar

    iantrem

    The deal to keep ARM in Cambridge is only until September 2021 and with a worry that US ownership could harm current partnerships in China, UK media are reporting this isn't going to be a smooth takeover. I think NVIDIA are going to have to extend a lot of those agreements to make this happen. With everything so up in the air over potential trade deals come the end of the year, I'm not sure how happy they would be to do that.

  3. Avatar

    jeffferguson

    "We are joining arms with Arm"


    Someone was paid to write that.

  4. Avatar

    red.radar

    Big strategic win for NVidia. Helps keep them from getting boxed out of data centers as intel and AmD extend integration with their cpu platforms.



  5. Avatar

    dbonds

    If Nvidia wasn't a direct competitor to Intel and AMD in the CPU market already, they certainly are now. This will certainly make them a major powerhouse in AI and specialty CPUs going forward.

  6. Avatar

    glenn8878

    Nvidia will hopefully enable ARM to have more competitive CPU designs. They might even develop and sell their own.

  7. Avatar

    brettscoast

    This is a pretty big deal anyway you cut it.

  8. Avatar

    olditpro2000

    NVIDIA won over critics by pledging to keep Arm as a separate company with open licensing, and it will honor SoftBank’s promises to keep Arm in Cambridge, England, it’s long-time home.


    I'm still not convinced that they will continue the open licensing forever...

  9. Avatar

    nbplopes

    I think this is a good move from NVidia. ARM designs need more quality competition.

  10. Avatar

    melinau

    A disastrous move from UK perspective.

    I understand NVIDIA has confirmed is an R&D Centre to remain in Cambridge (where the brains are!). Everything (& everyone) of value will be carted off to USA in short-order, along with the IP.

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