This acquisition is the largest ever in the microchip industry.
It’s official, Nvidia is going to buy Arm from the Japanese SoftBank for 40 billion dollars in cash and shares. This is the largest transaction ever in the microchip industry. As part of the agreement, SoftBank will take a stake in Nvidia that is expected to be less than 10%.
Arm is not as well known to the general public as processor manufacturers such as Qualcomm and Intel. And yet the company is behind the processors of millions of cell phones worldwide. Arm licenses system-on-a-chip designs to companies like Qualcomm, but also licenses its chipset instruction set, the collection of commands that software can use to control them, to brands like Apple that design their own chips. Samsung and Nvidia also use Arm designs.
In June, Apple announced that it would switch its Macs to its own Arm chips similar to those it designs for the iPhone and iPad, moving away from the Intel processors it has been using for 14 years.
Artificial intelligence and IoT in the spotlight
SoftBank bought Arm in 2016 for $32 billion, with the intention of strengthening its Internet of Things division. Nvidia said he expected this acquisition to boost its artificial intelligence ambitions.
“AI is the most powerful technological force of our time and has launched a new wave of computing,” said Jensen Huang, founder and CEO of Nvidia. “In the coming years, trillions of computers using AI will create a new Internet of Things that will be thousands of times larger than the Internet of People today.
SoftBank and Nvidia estimate that the agreement is expected to be concluded within 18 months, noting that it will require approval from the US, UK, EU and China.