Brit chip maker Arm gets snapped up by USA graphics giant Nvidia
Sep 15 2020
SoftBank is nearing a deal to sell British chip designer Arm Holdings, which it bought for 32 billion US dollars in 2016, to Nvidia Corp. for more than 40 billion USA dollars, Reuters reported on Saturday.
According to the terms of the deal, Nvidia will pay SoftBank $21.5 billion in Nvidia common stock and $12 billion in cash, which includes $2 billion payable at signing.
Nvidia will also issue $1.5bn in equity to ARM's employees. AI is the most powerful technology force of our time. "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". But that's even more true than I had imagined: NVIDIA won over critics by pledging to keep Arm as a separate company with open licensing, and it will honor SoftBank's promises to keep Arm in Cambridge, England, it's long-time home. SoftBank dropped around $30 billion on it four years ago with a view to revolutionising IoT or something, but now has more pressing cashflow concerns. The deal may hit regulatory hurdles, as ARM licenses its technology to many other companies, including Apple, AMD, Intel, and Qualcomm, and Nvidia's control over a vital license that its competitors need would raise questions by critics if the deal goes through.
It said: "We will create an open centre of excellence in the area once home to giants like Isaac Newton and Alan Turing, for whom key Nvidia technologies are named". And to cement its commitment, NVIDIA says it will build an AI supercomputer powered by Arm CPUs at the company's Cambridge headquarters.
He predicted big growth opportunities for Nvidia and Arm in the server CPU market, which is now dominated by Intel and Advanced Micro Devices.
Geoff Blaber, an analyst at CCS Insight, said he believed Arm's existing clients would be hostile to a sale to Nvidia. Announcing the deal on Monday, SoftBank said the combination of Arm and Nvidia will create a computing company "that will lead the era" of artificial intelligence.
Arm is a semiconductor and software company, based out of the United Kingdom, who was owned by Japan's SoftBank. "Independence is critical to the ongoing success of Arm and once that is compromised, its value will start to erode". But that will not have any effect on ARM's current licensing model.
But a takeover by Nvidia, one of the many firms that licences ARM's designs, appears to pose a threat to its business model - why will its hundreds of other customers now have faith that they will have equal access to its technology?
Cambridge's Labour MP, Daniel Zeichner, has also repeatedly called for the government to intervene in the sale of the company which has designed nearly the entire suite of chips which control smartphones. Up until now, ARM has been either an independent company or owned by a company outside the semiconductor industry.