After several rumors and leaks around the corner, the leader in AI NVIDIA, has finally announced that it is buying Arm Limited – a British semiconductor and software design company for $40 billion. The discussion related to the deal to buy the semiconductor and IP design firm was earlier linked to SoftBank Vision Fund. With this step, the company is all set to expand its horizons with Arm’s IP licensing business to further penetrate the data center market. The $40 billion deal is just being officially announced at the moment, and it is likely to be required to clear numerous regulatory obstacles in the United States, UK, China, and other governments around the world.
The British semiconductor firm and IP design company Arm was bought by SoftBank in 2016 for $31 billion. The company’s intellectual property rights help power mobile device processors of various leading companies including Samsung, Apple, and Qualcomm. Since the SoftBank acquisition 2016, the British company Arm has likely only augmented in value. The Santa Clara, California based company NVIDIA is the leading creator of GPUs, which British semiconductor and software design company Arm also designs.
According to Masayoshi Son, chairman, and CEO of SBG-
“NVIDIA is the perfect partner for Arm” “Since acquiring Arm, we have honored our commitments and invested heavily in people, technology and R&D, thereby expanding the business into new areas with high growth potential. Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm. This is a compelling combination that projects Arm, Cambridge, and the U.K. 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. We look forward to supporting the continued success of the combined business.”- CEO of SBG said.
In addition to the above, the Santa Clara, California based company Nvidia is positioning the achievement as setting up after that stage of AI computing. Both Nvidia and Arm see opportunities for expansion in enabling Artificial intelligence software that can run on Arm’s chips from those on minute smartphones to massive servers.
For this deal, SoftBank receives $12 billion in hard cash, along with $21.5 billion through NVIDIA stock. This huge deal will give SoftBank a comparatively sizable possession stake in NVIDIA; although according to the companies the whole venture is accepted to be less than 10 percent.
As per reports, it is the biggest deal for NVIDIA; the Arm acquisition marks their major attainment to date, effortlessly eclipsing the Mellanox attainment that closed a few months back. California based NVIDIA has undergone massive growth in terms of profits and capitalization in data enter the market.
Through this attainment, Nvidia and Arm don’t directly compete, and it could help navigate the processes. As far now, NVIDIA has a sizable $330B marketplace cap that is enough to make this deal possible.