Chip designer company ARM buyed for $ 40 billion.
Nvidia (NASDAQ: NVDA) Corp will buy British chip designer Arm from Japan’s SoftBank Group Corp for up to $ 40 billion, the companies said Monday, in a deal that will redefine the global semiconductor landscape.
The sale puts a vital supplier to Apple Inc (NASDAQ: AAPL) and other industry groups under the control of a single entity and will face potential reluctance from regulators and competitors of Nvidia, the largest US chip company by capitalization. stock market.
For Softbank (T: 9984), the sale represents an early exit from Arm, just four years after the technology group acquired it for $ 32 billion. The company’s chief executive, Masayoshi Son, has recognized Arm’s potential, but is cutting his stakes in some of its main assets to raise funds.
The move comes against a backdrop in which SoftBank executives, frustrated by the performance of the group’s shares, have held preliminary talks about the possibility of taking the Japanese tech group out of the stock market, a source told Reuters. Such talks could gain traction after the Arm sale. On the Tokyo Stock Exchange, SoftBank shares reacted with a 10% rise.
Nvidia will pay SoftBank $ 21.5 billion in stock and $ 12 billion in cash, including $ 2 billion at signing. The deal will see SoftBank and its Vision Fund, which has a 25% stake in Arm, take a stake in Nvidia of between 6.7% and 8.1%.
Nvidia CEO Jensen Huang said the transaction, which will propel his company into the data center chip business, is “pro-competitive” and marks “the first time in history that the industry has seen something that it is genuinely alternative “to Intel Corp’s (NASDAQ: INTC) dominance in the market.
In the face of eventual obstacles, the Taiwanese-born Huang emphasized that he will maintain Arm’s client neutrality and open license model and expand it by granting Nvidia’s IP licenses for the first time.
Nvidia said it will license the technology from its graphics processor partnership through Arm’s partner network. It will build chips for devices such as autonomous cars, but it will also make its technology available to others.
The companies did not discuss the deal with the British government until shortly before the announcement because the talks were secret, according to Huang. A new artificial intelligence research center will be built at Arm’s Cambridge headquarters.
“Cambridge is going to be a place of growth,” Huang said.