US$40 billion: Nvidia will acquire Arm

A few days ago, NVIDIA and SoftBank announced a final agreement. According to the agreement, NVIDIA will acquire the chip design company Arm from SoftBank at a price of US$40 billion.

As an artificial intelligence computing company, Nvidia has close cooperation with many global car companies such as Mercedes-Benz, Volvo, and Xiaopeng Motors, and conducts in-depth research and development in the field of autonomous driving.

It is reported that after the completion of the transaction, SoftBank will continue to ensure the long-term operation of Arm through its shareholding in NVIDIA (estimated to be less than 10%). In addition, the acquisition will be carried out in a cash + stock manner. NVIDIA will issue 21.5 billion US dollars of stock to pay to Softbank and pay 12 billion US dollars in cash (including the 2 billion US dollars paid at the time of the contract).

It is worth mentioning that, although the transaction does not completely use cash payment, NVIDIA still has a certain cash gap. According to the official website information, they will raise funds for this purpose and use the cash payment for this transaction.

The transaction is expected to be completed within 18 months and requires regulatory approvals from various countries and organizations such as the United Kingdom, China, the United States and the European Union. Previously, in order to obtain support from the British government when SoftBank acquired Arm, SoftBank promised to keep its Arm headquarters in Cambridge, England and create at least 1,500 jobs within 5 years. Nvidia also made a statement about this. In the future, Arm will still be headquartered in Cambridge, UK, and establish an AI research center to support research and development in multiple fields such as healthcare, life sciences, robotics, and autonomous vehicles.

At this stage, Arm is charging other manufacturers for licensing fees through a complex IP authorization model. Many companies such as Qualcomm, Apple, Samsung, and Huawei all rely on Arm’s smart phone chip architecture. Once Nvidia’s acquisition of Arm is successful, the independence of Arm and its ecosystem may be affected. Therefore, countries may also be considering the adverse effects after the completion of the acquisition. Whether the acquisition can be carried out or not is yet to be further confirmed by the regulatory authorities.