Nvidia Acquires Arm Holdings From SoftBank In A Deal Worth USD 40 Billion

The American chipmaker company Nvidia announced on the Sunday night that it has agreed to buy the SoftBank’s chipmaker firm Arm Holdings for USD 40 Billion. According to the blog post published by Nvidia, the deal is scheduled to complete in September 2021.

In the deal, Nvidia agreed to pay USD 21.5 Billion in stock and USD 12 Billion in stock to SoftBank. This includes the amount of USD 2 Billion payable at signing. The Japanese conglomerate who’s known for investing in technology companies bought the Arm Holdings in 2016 for USD 31 Billion. Following the acquisition, the U.S. chipmaker has committed to not change the Arm’s identity while

Nvidia’s move to acquire the British intellectual company aligns with the company’s motive to accelerate its pace in AI computing. In the announcement, it also said that it’s going to invest in the new AI research center to enable potential AI growth opportunities which can run from tiny smartphones to humongous servers.

“AI is the most powerful technology force of our time and has launched a new wave of computing,” said Jensen Huang, founder, and CEO of NVIDIA. “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,” he added.

In the statement, the company who has not only stronghold its market position in the PC world but also in the intelligent applications which include self-driving cars said that Nvidia commits to operating Arm’s “open-licensing model while maintaining the global customer neutralTity.” In addition to this, the company will also issue USD 1.5 Billion in equity to Arm’s employees.

Arm’s CEO Simon Segars said that together they would be working to address world problems such as climatic change, healthcare, agriculture, and education. He added that “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.” Along with this, Masayoshi Son, chairman and CEO of SoftBank Group said that “NVIDIA is the perfect partner for Arm.”

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In the last few years, SoftBank’s capability to invest in the right technology companies were questioned after they burned a lot of money in companies such as Uber and WeWork. Meanwhile, it has started a USD 108 Billion vision fund in 2019 after reporting an enormous amount of losses from its SoftBank Vision Fund 1. Recently, it announced that it will be selling around 198 Million shares of T-Mobile, a telecom company, which totals up to the amount of USD 21 Billion. The investment group’s move to sell up its 65% stake of the total stake in T-Mobile comes after its decision to free up the cash as the coronavirus crisis has hampered a lot of its prominent investments.

Recently, Nvidia announced its earnings and it has beat up the analysts’ expectations. In a statement, the company said that its gaming division produced USD 1.65 Billion in revenue which escalated by 26% year-over-year. Besides this, it announced the completion of its acquisition of Mellanox Technology Ltd. which contributed to 14% to its overall revenue. Moreover, it has started the production of its graphics card named A100 for the data centers.