The rumors of the past weeks have proved correct: NVIDIA has confirmed the acquisition of Arm for 40 billion dollars. The stated goal is to invest the resources acquired by Arm to enhance the technology for artificial intelligence, as reflected in the statements of the CEO of NVIDIA, Jensen Huang:
Artificial intelligence is the most powerful technological force of our time and has initiated a new wave of IT services. In the coming years, billions of computers running AI capabilities will create a new Internet of Things, thousands of times larger than today's Internet of People. Our combination will create a company fantastically positioned for the age of AI
It is one of the most important agreements in recent times in the semiconductor market, given that Arm, while not physically producing the chips, owns large intellectual properties that are used and licensed in them. And precisely on the license agreements, NVIDIA immediately clarifies that following the acquisition it will continue to pursue the same policy as Arm – there will be no closures or other changes to the strategy used so far.
The other most relevant aspects of the transaction, already confirmed by the parties, can be summarized as follows:
- Economic terms: NVIDA will pay SoftBank (the holding company that acquired Arm in 2016) $ 12 billion in cash (2 billion of which upon signing the sale agreement), plus $ 21.5 billion in shares; Arm employees will receive $ 1.5 billion in NVIDIA stock. SoftBank will have a stake in NVIDIA's capital of less than 10%. SoftBank may also receive an additional $ 5 billion (in cash or stock) based on Arm's achievement of specific financial goals.
- Headquarters and investments: Arm's headquarters will remain in Cambridge. NVIDIA has confirmed that it intends to make major investments to expand the headquarters with the creation of a new facility for research on artificial intelligence. In addition, with the aim of attracting researchers and scientists from all over the world, NVIDIA will build a supercomputer dedicated to AI based on the CPU Arm. The goal is to transform the Arm headquarters into a world-class technological hub
- Intellectual Property: Arm's intellectual property will continue to remain registered in the UK. As stated, NVIDIA will pursue the commercial strategy of licensing Arm's intellectual property in a fair and non-discriminatory manner towards customers.
- Conclusion of the agreement: it is estimated that it will take approximately 18 months to finalize the agreement. During this time, NVIDIA SoftBank and Arm will need to obtain approval of the transaction from the relevant authorities in the United Kingdom, China, the European Union and the United States