Nvidia to acquire Arm for $40bn, promises to keep its licencing business alive
(2020/09/14)
- Reference: 1600045298
- News link: https://www.theregister.co.uk/2020/09/14/nvida_arm_acquisition/
- Source link:
Nvidia has announced it will buy UK chip-designer Arm.
A Monday [1]statement from Nvidia and Arm’s current owner SoftBank says the transaction will be valued at $40bn.
Arm will remain headquartered in the UK and its brand and business model will persist.
Nvidia founder and CEO Jensen Huang [2]posted a letter about the deal in which he said: “Arm’s business model is brilliant. We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand Arm’s IP licensing portfolio with Nvidia’s world-leading GPU and AI technology.”
Huang’s letter explained that Nvidia wants to extend its AI tech to wherever Arm-powered devices can be found.
AI “will expand computing to every corner of the globe. Someday, trillions of computers running AI will create a new internet — the internet-of-things — thousands of times bigger than today’s internet-of-people,” Huang said. “Uniting Nvidia’s AI computing with the vast reach of Arm’s CPU, we will engage the giant AI opportunity ahead and advance computing from the cloud, smartphones, PCs, self-driving cars, robotics, 5G, and IoT.”
Nvidia's data centre biz tops gaming as lead revenue source – and it should enjoy being king while it lasts [3]READ MORE
“Our R&D scale will turbocharge Arm’s roadmap pace and accelerates data center, edge AI, and IoT opportunities,” Huang added.
Which sounds a lot like Nvidia intends to build itself a cloud-to-edge AI stack, an ambitious undertaking if ever there was one!
Just $12bn of the $40bn headline price that will be cash for SoftBank, but the Japanese company will also score $21.5 billion in Nvidia common stock – a sub-ten-percent stake. SoftBank can also earn $5bn more cash “subject to satisfaction of specific financial performance targets by Arm.” Arm employees will share $1.5 billion in equity, which may be a handy incentive to keep them on the payroll.
Those in the UK will also have a shiny new “world-class AI research center in Cambridge” as a possible workplace.
“This Nvidia research center will be the home of a state-of-the-art AI supercomputer powered by Arm CPUs” and “will be a major attraction for scientists from around the world doing groundbreaking research in healthcare, life sciences, robotics, self-driving cars, and other fields,” Huang wrote. The new centre will also become Nvidia’s Euro-HQ “to collaborate with universities, industrial partners, and startups. It will also be the Nvidia Deep Learning Institute for Europe, where we teach the methods of applying this marvelous AI technology.”
Arm CEO Simon Segars put his name to canned quotes that say "Arm and Nvidia share a vision and passion that ubiquitous, energy-efficient computing will help address the world’s most pressing issues from climate change to healthcare, from agriculture to education."
He added: “Delivering on this vision requires new approaches to hardware and software and a long-term commitment to research and development. By bringing together the technical strengths of our two companies we can accelerate our progress and create new solutions that will enable a global ecosystem of innovators. My management team and I are excited to be joining Nvidia so we can write this next chapter together.”
Don’t hold your breath waiting for ribbon-cuttings because SoftBank and Nvidia say the deal will take 18 months to close. Regulators will likely need to sign off on it, too.
SoftBank [4]acquired Arm for $31bn in 2016. The direct consideration it will receive for the sale – $12bn in cash and $21.5bn – represents an eight percent gain over four years during which major stock exchange indices have close-to-doubled. ®
Get our [5]Tech Resources
[1] https://nvidianews.nvidia.com/news/nvidia-to-acquire-arm-for-40-billion-creating-worlds-premier-computing-company-for-the-age-of-ai
[2] https://blogs.nvidia.com/blog/2020/09/13/jensen-employee-letter-arm/
[3] https://www.theregister.com/2020/08/20/nvidia_q2_2021_mellanox/
[4] https://www.theregister.com/2016/07/18/softbank_to_buy_arm
[5] https://whitepapers.theregister.com/
A Monday [1]statement from Nvidia and Arm’s current owner SoftBank says the transaction will be valued at $40bn.
Arm will remain headquartered in the UK and its brand and business model will persist.
Nvidia founder and CEO Jensen Huang [2]posted a letter about the deal in which he said: “Arm’s business model is brilliant. We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand Arm’s IP licensing portfolio with Nvidia’s world-leading GPU and AI technology.”
Huang’s letter explained that Nvidia wants to extend its AI tech to wherever Arm-powered devices can be found.
AI “will expand computing to every corner of the globe. Someday, trillions of computers running AI will create a new internet — the internet-of-things — thousands of times bigger than today’s internet-of-people,” Huang said. “Uniting Nvidia’s AI computing with the vast reach of Arm’s CPU, we will engage the giant AI opportunity ahead and advance computing from the cloud, smartphones, PCs, self-driving cars, robotics, 5G, and IoT.”
Nvidia's data centre biz tops gaming as lead revenue source – and it should enjoy being king while it lasts [3]READ MORE
“Our R&D scale will turbocharge Arm’s roadmap pace and accelerates data center, edge AI, and IoT opportunities,” Huang added.
Which sounds a lot like Nvidia intends to build itself a cloud-to-edge AI stack, an ambitious undertaking if ever there was one!
Just $12bn of the $40bn headline price that will be cash for SoftBank, but the Japanese company will also score $21.5 billion in Nvidia common stock – a sub-ten-percent stake. SoftBank can also earn $5bn more cash “subject to satisfaction of specific financial performance targets by Arm.” Arm employees will share $1.5 billion in equity, which may be a handy incentive to keep them on the payroll.
Those in the UK will also have a shiny new “world-class AI research center in Cambridge” as a possible workplace.
“This Nvidia research center will be the home of a state-of-the-art AI supercomputer powered by Arm CPUs” and “will be a major attraction for scientists from around the world doing groundbreaking research in healthcare, life sciences, robotics, self-driving cars, and other fields,” Huang wrote. The new centre will also become Nvidia’s Euro-HQ “to collaborate with universities, industrial partners, and startups. It will also be the Nvidia Deep Learning Institute for Europe, where we teach the methods of applying this marvelous AI technology.”
Arm CEO Simon Segars put his name to canned quotes that say "Arm and Nvidia share a vision and passion that ubiquitous, energy-efficient computing will help address the world’s most pressing issues from climate change to healthcare, from agriculture to education."
He added: “Delivering on this vision requires new approaches to hardware and software and a long-term commitment to research and development. By bringing together the technical strengths of our two companies we can accelerate our progress and create new solutions that will enable a global ecosystem of innovators. My management team and I are excited to be joining Nvidia so we can write this next chapter together.”
Don’t hold your breath waiting for ribbon-cuttings because SoftBank and Nvidia say the deal will take 18 months to close. Regulators will likely need to sign off on it, too.
SoftBank [4]acquired Arm for $31bn in 2016. The direct consideration it will receive for the sale – $12bn in cash and $21.5bn – represents an eight percent gain over four years during which major stock exchange indices have close-to-doubled. ®
Get our [5]Tech Resources
[1] https://nvidianews.nvidia.com/news/nvidia-to-acquire-arm-for-40-billion-creating-worlds-premier-computing-company-for-the-age-of-ai
[2] https://blogs.nvidia.com/blog/2020/09/13/jensen-employee-letter-arm/
[3] https://www.theregister.com/2020/08/20/nvidia_q2_2021_mellanox/
[4] https://www.theregister.com/2016/07/18/softbank_to_buy_arm
[5] https://whitepapers.theregister.com/
Stock?
Anonymous Coward
Nvidia's *REVENUE* was only $11 billion last year. ARMs was under $2 billion.
So 10% of that share ~$1.3 billion, and from that you have to cover $21 billion in future profits?
Methinks they'll exit their position as fast as they can while the Fed is propping up the stock market before the fed funny money bubble pops.
China ARM and a leg
Spaller
Does that China ARM subsidiary come with the deal? Last I heard they had their moat filled and drawbridge up. Do they have the AI to take of that?
AI. Check.
Internet of things. Check.
World class. Check.
BINGO.