There were rumors about this possible purchase for weeks and it’s finally official, NVIDIA buys ARM for 40 billion dollars, it is the largest semiconductor deal ever. The agreement must now be approved by regulators in different countries where the companies are involved.
NVIDIA will pay $21.5 billion in stock to SoftBank (they will own nearly 10% of NVIDIA shares) and $12 billion in cash to take over ARM. In addition, the Japanese may receive an extra 5,000 million depending on how successful ARM develops in the upcoming years and if it meets certain objectives imposed in the agreement. Additionally, $1.5 billion worth NVIDIA shares will be paid to ARM employees.
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NVIDIA buys ARM but the acquisition, however, is not going to be overnight. It must be approved by regulators in different countries and regions. They need approval from the governments of the United States, the European Union, China and the United Kingdom, among others. This process is estimated to take about 18 months. NVIDIA announced that it will keep ARM’s UK headquarters and invest in a new facility there to drive artificial intelligence research.
Over the last few years NVIDIA has evolved from being the king of graphics processors to other fields such as artificial intelligence, large-scale data processing or even automobiles.
NVIDIA has indicated that ARM will “continue to operate its open-licensing model, while maintaining its global customer neutrality”. We recall that ARM offers its technology to other manufacturers so they design their chips, for example Intel, Samsung, Broadcom, AMD, Huawei, Apple, or Qualcomm. After that big of a purchase, NVIDIA is probably not about to change terms and conditions and lose these customers.