Officially Announced! Nvidia Acquires ARM for $40 Billion

On Monday, September 14, SoftBank Group (SoftBank) and Nvidia (NVIDIA) formally issued a document announcing that the two parties have reached a final agreement for NVIDIA to acquire chip design company ARM at a price of up to 40 billion US dollars. The transaction will include $21.5 billion in NVIDIA stock and $12 billion in cash, including $2 billion payable at the time of the contract.
As the world’s leading provider of semiconductor intellectual property (IP), ARM has a fairly complete product line, including processors, media (graphics processors, video and display modules), system IP and software, physical design, software tools, and Networking, image signal, etc.
 
Its main business model is to provide ARM's advanced IP technology to chip companies or hardware system manufacturers to collect licensing fees. Manufacturers design and develop chips based on IP. Currently, more than 95% of smartphones in the world use chips based on the ARM architecture.
NVIDIA is one of the world's largest computer chip companies, specializing in the production of chips for computer graphics, data centers, automobiles and artificial intelligence.
The combination of the two combines NVIDIA's leading AI computing platform with ARM's huge ecosystem, creating a top computing company in the artificial intelligence era. SoftBank will continue to ensure the long-term success of ARM through its shareholding in NVIDIA (estimated to be less than 10%).
 















Huang Renxun, the founder and CEO of NVIDIA, said: “Artificial intelligence is the most powerful technological force in the current era. It has set off a new wave of computing.” “In the next few years, trillions of computers running artificial intelligence will Create a new Internet of Things that is thousands of times larger than the current one. Our merger will create a company with a mythical status in the AI ​​era."
Masayoshi Son, Chairman and CEO of SoftBank, said: “NVIDIA is the perfect partner for ARM.” “Since the acquisition of ARM, we have fulfilled our promises and made substantial investments in personnel, technology, and R&D to improve business Expand into new areas with high growth potential. Working with global technology innovation leaders has created new and exciting opportunities for ARM. This is a compelling combination and we look forward to continued success after the merger."
NVIDIA's commitment to ARM
As part of NVIDIA, ARM will continue to operate its open licensing model while maintaining global customer neutrality, which is also the foundation of its success. ARM’s partners will also benefit from the products of the two companies, including numerous innovations from NVIDIA.
Softbank and ARM will also work to meet the commitment made when acquiring ARM in 2016, which is scheduled to be completed in September 2021. After the transaction is completed, NVIDIA intends to retain the ARM name and strong brand image and expand its base in Cambridge. ARM's intellectual property rights will continue to be registered in the UK.
At the same time, NVIDIA will build a new global AI super R&D center on the basis of ARM's UK R&D base.
In addition, the proposed transaction must meet customary closing conditions, including obtaining regulatory approvals from the United Kingdom, China, the European Union and the United States. The transaction is expected to be completed in about 18 months.
Regarding the management problems of ARM's joint ventures in China earlier, NVIDIA CEO Huang Renxun said that there are ways to solve them and he is confident that the acquisition of ARM will be approved by the Chinese regulatory authorities.