Nvidia buys Arm for a record-breaking $40 billion

Nvidia buys Arm for a record-breaking $40 billion

Nvidia buys Arm for a record-breaking $40 billion

News unit EMGblog.com: It was nearly two months ago that Bloomberg for It first announced Nvidia’s desire to buy ARM and the company’s initial talks with SoftBank as the owner of Arm; this news took a more serious approach with the progress of negotiations and signs from the parties until Nvidia finally on Monday, September 14, 2020 (24 September 2019) in a official statement confirmed these claims and announced the signing of a definitive agreement with SoftBank to purchase Arm for a total amount of 40 billion dollars. This contract, which some call the biggest example in the semiconductor industry, is still in its early stages and needs regulatory approval in different countries and regions.

Jensen Huang (Jensen Huang), the founder and CEO of Nvidia, in a letter addressed to the employees of this group, referring to the signing of a definite contract for the purchase of Arm from the history and the brilliant history of Arm in the field of CPU manufacturing, which led to the presence of the processors of this group in More than 180 billion computers have been built to date, he said, calling Arm the most popular CPU in the world. Huang spoke about Nvidia’s joining Arm in the era of artificial intelligence, which in his view is called “the most powerful technological force of our era” and added: “By learning from data, artificial intelligence supercomputers have the ability to write software that no human is capable of.” . Amazingly, the AI ​​software will infer the best plan by receiving environmental cues and act intelligently [towards it]. This new type of software will extend [computing] computing to every corner of the world [and] one day trillions of computers running AI will form a new Internet—the Internet of Things—thousands of times larger than today’s “Internet of People.” ”

Jensen Huang, the founder and CEO of Nvidia

Huang, continuing his speech, announced the addition of Nvidia’s artificial intelligence team to the Arm ecosystem, where the number of developers of this company is The current 2 million will increase to 15 million software developers. Arm’s headquarters will remain in Cambridge, England, and the Arm name and its licensing practices with other companies will not change.

The settlement process and the payment of the agreed amount between Arm and SoftBank will be done with a combination of cash and stock, which includes $21.5 billion of Nvidia common stock and $12 billion in cash, of which $2 billion is the latter. It will be payable at the time of signing the agreement. Nvidia will also award another $1.5 billion in stock to Arm employees. The Japanese company SoftBank will also have the possibility of receiving another 5 billion dollars in the form of the so-called earn-out clause of this contract. According to earn-out, the buyer guarantees to pay another amount to the seller if the value of the purchased collection increases and reaches a certain limit.

According to Bloomberg report, SoftBank shares rose by 10% after announcing this news, which indicates the positive reaction of the market to Arm joining Nvidia.

The importance of the Arm group in the semiconductor industry is much more than the income that this company obtains through the process of granting licenses to manufacturers and selling processor designs; The company’s technology is at the heart of more than 1 billion smartphones that are sold annually, and chipsets that use the structure and code written by Arm are almost everywhere, from giant factory equipment to household appliances. In the context of the importance of Arm, the CEO of Nvidia refers to it as a company with an unparalleled reach that no other company in the history of technology can see.

Japan’s SoftBank bought Arm Group in 2016 for $31.6 billion, the largest acquisition in the semiconductor industry at the time. By increasing this figure to 40 billion dollars, but now this record has been moved and has been given to Nvidia.

The regulatory approval process in this contract is also an important part of it, where apart from the United States, Britain and China, the European Union must also approve this process separately. This process in China will probably not be very easy due to the problems between this country and the United States, and the CEO of Nvidia has also spoken about focusing and spending time coordinating with the regulatory units in China. The finalization of this contract apparently needs 18 months and will probably be fully completed in early 2020.

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