Tech firm Nvidia has announced plans to acquire UK-based chip manufacturer Arm in a deal worth $40 billion.
The deal comprises $12 billion in cash, with $2 billion to be paid on signing, along with $21.5 billion in Nvidia common stock. Nvidia will also issue $1.5 billion in equity to Arm staff, and current Arm owner SoftBank may receive up to $5 billion as part of an earn-out construct. The deal is expected to complete in 18 months.
This acquisition is considered by Nvidia as creating “the world’s premier computer company for the age of AI”. Arm isn’t expected to see any significant changes to its operations, and will remain headquartered in the UK with its existing management team.
Age of AI
“AI is the most powerful technology force of our time and has launched a new wave of computing,” said NVIDIA 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 and NVIDIA share a vision and passion that ubiquitous, energy-efficient computing will help address the world’s most pressing issues from climate change to healthcare, from agriculture to education,” said Arm CEO Simon Segars.
“Delivering on this vision requires new approaches to hardware and software and a long-term commitment to research and development. By bringing together the technical strengths of our two companies we can accelerate our progress and create new solutions that will enable a global ecosystem of innovators. My management team and I are excited to be joining NVIDIA so we can write this next chapter together.”
SoftBank initially acquired Arm back in July 2016 for $32 billion. Within a year, it was looking to sell a 25 per cent stake in the company.
