Nvidia is expected to face tough conditions to protect jobs and the status of Arm’s Cambridge headquarters as part of the deal.SoftBank paid $ 32 billion for the company four years ago as part of a deal that pledged to keep the headquarters in Cambridge. It has also paid off a fortune for the executives of Arm and this time around Arm employees will share $ 1.5 billion in Nvidia stock.
Founded in Cambridge in 1990, Arm specializes in microprocessors and dominates the global smartphone market. But its chips are also found in countless sensors, smart devices and cloud services.
Nvidia, based in California, is best known for graphics cards which are preferred in the video game industry. It has seen sales skyrocket during the coronavirus crisis, with gambling being a popular locked-out pastime.
Its products are also increasingly used for artificial intelligence and in data centers.
Jensen Huang, chief executive of Nvidia, said the deal would create “the first computer company in the age of artificial intelligence,” and pledged to keep Arm’s headquarters in Cambridge.
“AI is the most powerful technological force of our time and has launched a new wave of computing,” he said in a statement. “In the years to come, billions of AI-powered computers will create a new Internet of Things that will be thousands of times larger than the Internet of people today. Our combination will create a company that is fabulously positioned for the age of AI. promised that the agreement
“Arm will remain based in Cambridge. We will develop this great site and build a world-class AI research center, 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 do groundbreaking work, Nvidia will build a cutting-edge artificial intelligence supercomputer, powered by Arm processors. Arm Cambridge will be a world-class technology hub. ”
However, his move to Arm is unlikely to go unchallenged in the industry.
Arm is currently licensing its technology to any company that wishes to purchase it and its customers include Apple, Samsung and Qualcomm, who in turn use it in their devices.
This gives Nvidia control over Arm’s technology that could be used to manufacture its own mainframe chips, doubling Nvidia’s strategy of buying technology from parts of the booming data center business. where she is not currently playing.
Nvidia’s deal would also put Arm under the control of a US-based fighter amid a trade cold war between the US and China, which is rushing to develop a domestic semiconductor industry while that US officials seek to stem its rise.
Geoff Blaber, vice president of research for the Americas at CCS Insights, said the deal “will rightly meet huge opposition” from Arm’s customers.
“An acquisition by Nvidia would be detrimental to Arm and its ecosystem,” said Blaber. “Independence is essential to Arm’s continued success, and once it is compromised, its value will begin to erode.”
Nvidia started out as a graphics chip designer and has grown into products for areas such as artificial intelligence and data centers.
The acquisition of Arm will put Nvidia in even more intense competition with competitors in the data center chip market such as Intel and Advanced Micro Devices, as Arm has developed technology to compete with their chips.
Softbank boss Masayoshi Son had announced Arm’s potential but was cutting its stakes in major assets to raise cash.
The deal will see SoftBank and the $ 100 billion Vision Fund, which owns a 25% stake in Arm, with a stake in Nvidia between 6.7% and 8.1%.
SoftBank could also receive an additional $ 5 billion in cash or stock depending on the chip designer’s business performance.