Nvidia has confirmed that it’s acquiring UK chip maker Arm from Japanese owner SoftBank in a US$40 billion deal made up of a combination of shares and cash, though the move is yet to undergo regulatory scrutiny.
Technology from Cambridge-based semiconductor and software design company Arm can already be found in many smartphones and tablets we use every day, with 180 billion chips shipped so far by licensees. Nvidia hopes that the acquisition of the company SoftBank bought in September 2016 will create “a premier computing company for the age of artificial intelligence.”
“AI is the most powerful technology force of our time and has launched a new wave of computing,” said Nvidia’s founder and CEO, Jensen Huang. “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.”
Arm will continue to be headquartered in Cambridge, with Nvidia expanding the campus to include a new AI research center as well as investing in a “state-of-the-art, Arm-powered supercomputer.” A startup incubator be also be launched, there will be new training facilities for developers, and the company will continue its open licensing model and global customer neutrality.
Under the deal, SoftBank will get $12 billion in cash from Nvidia, as well as over 44 million shares in the company valued at $21.5 billion. SoftBank could also get up to $5 billion extra in cash or stock depending on Arm performance targets being met, and will have around a 10 percent stake in the new venture. Nvidia will also issue $1.5 billion in shares to Arm employees.
All of this is subject to obtaining regulatory approval from the UK, China, the EU and the US, with full completion expected in around 18 months. It remains to be seen how competitors take to the news, though industry analyst Geoff Blaber told The Guardian that the deal would “rightly face huge opposition.”
“An acquisition by Nvidia would be detrimental to Arm and its ecosystem,” he said. “Independence is critical to the ongoing success of Arm and once that is compromised, its value will start to erode.”
And the BBC reports that two of Arm’s co-founders have voiced concerns about a US-controlled company becoming caught up in a US trade clash with China. “If hundreds of UK companies that incorporate Arms in their products want to sell it, and export it to anywhere in the world including China – which is a major market – the decision on whether they will be allowed to export it will be made in the White House and not in Downing Street,” co-founder Hermann Hauser told BBC Radio 4.
Interesting times ahead for the chip maker.
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