nVidia commits to buy Arm from Softbank

Graphics and AI specialist nVidia has been confirmed as the buyer of Arm from Softbank Vision Fund in a transaction worth up to $40bn, with the fund retaining a 10 per cent share in Arm if the deal completes.

The deal will be subject to regulatory approval in four territories: UK, China, the European Union, and the US. If successful, the transaction should complete in 18 months’ time though the nature of the deal, which sees the leading processor IP vendor become part of a large semiconductor vendor that competes with Arm’s own customers, could easily face challenges.

In the statement announcing the deal, nVidia emphasised the importance of the deal to its current strategy focused heavily on machine learning: “The combination brings together nVidia’s leading AI computing platform with Arm’s vast ecosystem to create the premier computing company for the age of artificial intelligence”.

Jen-Hsun Huang, founder and CEO of nVidia, said: “For Arm’s ecosystem, the combination will turbocharge Arm’s R&D capacity and expand its IP portfolio with nVidia’s world-leading GPU and AI technology.

“Arm will remain headquartered in Cambridge. We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields. And, to attract researchers and scientists from the UK and around the world to conduct groundbreaking work, nVidia will build a state-of-the-art AI supercomputer, powered by Arm CPUs.”

The deal employs $21.5bn of nVidia stock and a cash payment of $12bn in total, with $2bn paid upfront. SoftBank may receive an additional $5bn under an earn-out clause and nVidia will issue another $1.5bn of its stock to give to Arm employees.

The GPU maker said it aims to maintain Arm’s “customer neutrality that has been foundational to its success” and will keep the Arm brand name.