Nvidia to buy UK's Arm, sparking fears of chip dominance

Jensen Huang

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. SoftBank could earn a further $5 billion if Arm hits performance targets while Arm employees will get $1.5 billion worth of Nvidia shares.

Shares of Nvidia rose 7.6 percent on Monday following the announcement.

A spokesman for Mr. Johnson said ministers had spoken to the relevant companies and were looking at what the deal meant for Arm's Cambridge base.

"AI is the most powerful technology force of our time and has launched a new wave of computing", Jensen Huang, NVIDIA's CEO, said in a statement. "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". The company is positioning the acquisition as setting up the next stage of AI computing.

NVIDIA plans to expand Arm's research facility in Cambridge, supporting developments in healthcare, life sciences, robotics, self-driving cars, and other fields while the company also continues to run its prior business as it did before the purchase.

KitGuru Says: NVIDIA's acquisition of ARM is expected to complete within the next 18 months, so there is still a long road ahead before the two companies fully merge.

Credit Nvidia
Credit Nvidia

Even if Nvidia only pays $12 billion in cash to SoftBank in this transaction, they may still have a funding gap and need to raise funds.

SoftBank bought Arm for about $32 billion in 2016, in a deal that sparked fears one of Britain's most successful tech companies would succumb to a foreign takeover.

Arm will be a division under Nvidia, with its headquarters remaining in Cambridge. (SBG) and the SoftBank Vision Fund (together, "SoftBank") in a transaction valued at $40 billion. "This is a compelling combination that projects Arm, Cambridge and the United Kingdom 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", said Son.

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 chief executives of Nvidia and Arm told Reuters in an interview that Nvidia will retain Arm's United Kingdom headquarters - which exempt it from many U.S. export control laws - and open licensing model. The company's business centers on designing chips and licensing the intellectual property to customers, rather than chip manufacturing, for which it relies on partners. There's already tremendous uncertainty about what this deal might mean for competition long-term, and whether Nvidia will seek to exploit its ownership of the ARM IP to its own unique benefit in a way that is harmful to the ISA's current licensees. 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.

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