ARM sale to Nvidia agreed at $40 billion

September 14, 2020 //By Peter Clarke
ARM sale to Nvidia agreed at $40 billion
SoftBank Group Corp. has announced it plans to sell ARM Ltd. to GPU and AI technology vendor Nvidia Corp. for up to $40 billion.

Although many have spoken out against the deal on the grounds it could weaken ARM's independent IP licensing model, Nvidia has provided some assurances to try and dispel doubts.

Nvidia said it will continue ARM's open licensing model and customer neutrality while adding Nvidia technology into ARM's portfolio. In addition, Nvidia said it would retain the ARM brand and that ARM's intellectual property would continue to be registered in the UK.

Nvidia said ARM would continue to be headquartered in Cambridge, UK and that Nvidia would expand ARM's R&D presence there. The expansion would include the creation of an AI research and education center and the building of an ARM/Nvidia AI supercomputer for research purposes.

The terms have been agreed by the boards of SoftBank, Nvidia and ARM, but completion of the deal is dependent on regulatory approval from the UK, China, the European Union and the United Stares. The size and strategic significance of the deal means that Nvidia is forecasting it could take up to 18 months to complete.

The deal is being funded with shares and cash and as a result SoftBank will acquire a stake in Nvidia, which is expected to be under 10 percent. It also includes a $5 billion bonus for SoftBank if ARM achieves certain financial performance targets that would take the value up to $40 billion.

Jensen Huang, founder and CEO of NVIDIA, said: "AI is the most powerful technology force of our time and has launched a new wave of computing. In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today’s internet-of-people. Our combination will create a company fabulously positioned for the age of AI."

Nvidia said that SoftBank and ARM remain committed to satisfying the undertakings made by SoftBank when it acquired Arm in 2016 and which are scheduled to complete in September 2021. In its statement Nvidia did not speak about what would happen after 2021 or any further time-bound undertakings.

The deal is constructed with $2 billion payable at signing and an eventual total of $12 billion to be paid in cash plus $21.5 billion in Nvidia common stock. Nvidia will also provide $1.5 billion in equity to ARM employees.

The deal does not include ARM's IoT services group, which was split away from the main company a few months ago.

Related links and articles:

www.nvidia.comwww.arm.comwww.softbank.com

Other ARM articles:


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