Sunday, September 13th 2020

NVIDIA to Acquire Arm for $40 Billion, Creating World's Premier Computing Company for the Age of AI

NVIDIA and SoftBank Group Corp. (SBG) today announced a definitive agreement under which NVIDIA will acquire Arm Limited from SBG and the SoftBank Vision Fund (together, "SoftBank") in a transaction valued at $40 billion. The transaction is expected to be immediately accretive to NVIDIA's non-GAAP gross margin and non-GAAP earnings per share.

The combination brings together NVIDIA's leading AI computing platform with Arm's vast ecosystem to create the premier computing company for the age of artificial intelligence, accelerating innovation while expanding into large, high-growth markets. SoftBank will remain committed to Arm's long-term success through its ownership stake in NVIDIA, expected to be under 10 percent.
"AI is the most powerful technology force of our time and has launched a new wave of computing," said Jensen Huang, founder and CEO of NVIDIA. "In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today's internet-of-people. Our combination will create a company fabulously positioned for the age of AI.

"Simon Segars and his team at Arm have built an extraordinary company that is contributing to nearly every technology market in the world. Uniting NVIDIA's AI computing capabilities with the vast ecosystem of Arm's CPU, we can advance computing from the cloud, smartphones, PCs, self-driving cars and robotics, to edge IoT, and expand AI computing to every corner of the globe.

"This combination has tremendous benefits for both companies, our customers, and the industry. For Arm's ecosystem, the combination will turbocharge Arm's R&D capacity and expand its IP portfolio with NVIDIA's world-leading GPU and AI technology.

"Arm will remain headquartered in Cambridge. We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields. And, to attract researchers and scientists from the U.K. and around the world to conduct groundbreaking work, NVIDIA will build a state-of-the-art AI supercomputer, powered by Arm CPUs. Arm Cambridge will be a world-class technology center."

"NVIDIA is the perfect partner for Arm," said Masayoshi Son, chairman and CEO of SBG. "Since acquiring Arm, we have honored our commitments and invested heavily in people, technology and R&D, thereby expanding the business into new areas with high growth potential. Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm. This is a compelling combination that projects Arm, Cambridge and the U.K. to the forefront of some of the most exciting technological innovations of our time and is why SoftBank is excited to invest in Arm's long-term success as a major shareholder in NVIDIA. We look forward to supporting the continued success of the combined business."

"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," said Simon Segars, CEO of Arm. "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."

Commitment to Arm and the UK
As part of NVIDIA, Arm will continue to operate its open-licensing model while maintaining the global customer neutrality that has been foundational to its success, with 180 billion chips shipped to-date by its licensees. Arm partners will also benefit from both companies' offerings, including NVIDIA's numerous innovations.

SoftBank and Arm are fully committed to satisfying the undertakings made by SoftBank when it acquired Arm in 2016, which are scheduled to complete in September 2021. Following the closing of the transaction, NVIDIA intends to retain the name and strong brand identity of Arm and expand its base in Cambridge. Arm's intellectual property will remain registered in the U.K.

NVIDIA will build on Arm's R&D presence in the U.K., establishing a new global center of excellence in AI research at Arm's Cambridge campus. NVIDIA will invest in a state-of-the-art, Arm-powered AI supercomputer, training facilities for developers and a startup incubator, which will attract world-class research talent and create a platform for innovation and industry partnerships in fields such as healthcare, robotics and self-driving cars.

Additional Transaction Details
Under the terms of the transaction, which has been approved by the boards of directors of NVIDIA, SBG and Arm, NVIDIA will pay to SoftBank a total of $21.5 billion in NVIDIA common stock and $12 billion in cash, which includes $2 billion payable at signing. The number of NVIDIA shares to be issued at closing is 44.3 million, determined using the average closing price of NVIDIA common stock for the last 30 trading days. Additionally, SoftBank may receive up to $5 billion in cash or common stock under an earn-out construct, subject to satisfaction of specific financial performance targets by Arm.

NVIDIA will also issue $1.5 billion in equity to Arm employees.

NVIDIA intends to finance the cash portion of the transaction with balance sheet cash. The transaction does not include Arm's IoT Services Group.

The proposed transaction is subject to customary closing conditions, including the receipt of regulatory approvals for the U.K., China, the European Union and the United States. Completion of the transaction is expected to take place in approximately 18 months.

Conference Call and Webcast Details
NVIDIA will conduct a webcast at 5:30 a.m. PT on Monday, September 14, to discuss the transaction. The webcast is available on NVIDIA's Investor Relations website at https://investor.nvidia.com/home/default.aspx/home/default.aspx. A webcast replay and a copy of the webcast presentation materials will also be available at https://investor.nvidia.com/home/default.aspx/home/default.aspx.
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114 Comments on NVIDIA to Acquire Arm for $40 Billion, Creating World's Premier Computing Company for the Age of AI

#1
Caring1
The way it's meant to be played. ;)
Posted on Reply
#2
lynx29
I expect to have a family and a career in next couple of years. My gaming time is going to basically vanish, so I imagine this rtx 3080 and zen 3 build will be my last. I probably will never get to experience ARM cpu's
Posted on Reply
#3
Fouquin
lynx29
I expect to have a family and a career in next couple of years. My gaming time is going to basically vanish, so I imagine this rtx 3080 and zen 3 build will be my last. I probably will never get to experience ARM cpu's
Okay but this has nothing to do with gaming.
Posted on Reply
#4
kings
Nvidia will become a giant (even more).

Hopefully the development of ARM will improve a lot from now on, Nvidia has the means to do so.
Posted on Reply
#5
lexluthermiester
Gee, who saw this coming..

Wouldn't want to be Apple right now..
Posted on Reply
#6
Mamya3084
Rog 4...now with RTX!! Can't wait for 3fps mobile gaming
Posted on Reply
#7
lexluthermiester
Mamya3084
Rog 4...now with RTX!! Can't wait for 3fps mobile gaming
Yeah, NVidia is going to pair RTX with a mobile SOC... That'll happen... :kookoo::wtf:
Posted on Reply
#8
Fluffmeister
If i could be bothered to search, I'm sure I could find forum warriors being happy that Nvidia don't have a x86 license.

How times change.
Posted on Reply
#9
lynx29
Fouquin
Okay but this has nothing to do with gaming.
I thought I read somewhere ARM cpu's are the future of gaming? big reason Nvidia is doing this? or is it specifically for AI and machine learning stuff only?
lexluthermiester
Gee, who saw this coming..

Wouldn't want to be Apple right now..
I thought Apple was making their own CPU's soon, no third party needed?
Posted on Reply
#10
lexluthermiester
lynx29
I thought Apple was making their own CPU's soon, no third party needed?
While they are using their own designs, the base instruction set is still ARM based and Apple is required to license it. NVidia might increase the pricing for Apple or deny them a license outright. Apple is not in a favorable position ATM.
Posted on Reply
#11
biffzinker
lynx29
I thought Apple was making their own CPU's soon, no third party needed?
Only with a perpetual ISA license from ARM.
Posted on Reply
#12
illli
I feel like AMD is about to find itself in a difficult position. They are a small company compared to intel, and before AMD only had to contend with intel. Now they have to contend with both intel and Nvidia in the cpu market, which are both much larger. I think you'll soon see more inroads in desktop and laptop and servers with arm. I can see AMD being squeezed out more and they don't have other acquisitions to diversify with like intel and NV has (buying other companies over the years and branching out in other markets)
Posted on Reply
#13
lexluthermiester
Fluffmeister
If i could be bothered to search, I'm sure I could find forum warriors being happy that Nvidia don't have a x86 license.
It's not like they can't afford it. In fact Intel might welcome the influx of money.
Posted on Reply
#14
Verpal
lexluthermiester
While they are using their own designs, the base instruction set is still ARM based and Apple is required to license it. NVidia might increase the pricing for Apple or deny them a license outright. Apple is not in a favorable position ATM.
I think current ISA will still last Apple for quite some time, as for the next ISA revision....... Apple might want to tread carefully.
Posted on Reply
#15
AsRock
TPU addict
lexluthermiester
While they are using their own designs, the base instruction set is still ARM based and Apple is required to license it. NVidia might increase the pricing for Apple or deny them a license outright. Apple is not in a favorable position ATM.
I guess this be effecting a few, like AMD.
Posted on Reply
#17
watzupken
While I am no fan of Nvidia acquiring ARM based no their poor history, but as long as the regulators are very strict to ensure Nvidia keeps to the open licensing of the IP, I feel that should still be fine for now.
Posted on Reply
#18
chodaboy19
No change to the current licensing model:

blogs.nvidia.com/blog/2020/09/13/jensen-employee-letter-arm/
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.

Arm’s headquarter will remain in Cambridge and continue to be a cornerstone of the U.K. technology ecosystem. NVIDIA will retain the name and strong brand identity of Arm. Simon and his management team are excited to be joining NVIDIA.
Posted on Reply
#19
lexluthermiester
biffzinker
ARM does offer the blueprints for a high performance cores.
en.m.wikipedia.org/wiki/ARM_Cortex-X1
While true, that is based on an evolution of the Maxwell platform. Turing/Ampere are something else entirely. Just not seeing that happen anytime soon unless NVidia got into ARM for desktops. God help Intel if they do..
watzupken
While I am no fan of Nvidia acquiring ARM based no their poor history, but as long as the regulators are very strict to ensure Nvidia keeps to the open licensing of the IP, I feel that should still be fine for now.
Completely agree.
Verpal
I think current ISA will still last Apple for quite some time, as for the next ISA revision....... Apple might want to tread carefully.
Oh no, that's not how it works. ARM licensing is an ongoing thing. NVidia could change things on Apple and there would little to nothing Apple could do about it.
Posted on Reply
#20
lynx29
illli
I feel like AMD is about to find itself in a difficult position. They are a small company compared to intel, and before AMD only had to contend with intel. Now they have to contend with both intel and Nvidia in the cpu market, which are both much larger. I think you'll soon see more inroads in desktop and laptop and servers with arm. I can see AMD being squeezed out more and they don't have other acquisitions to diversify with like intel and NV has (buying other companies over the years and branching out in other markets)
It's important to note that AMD Ryzen latest gen CPU's have 0 security issues to my knowledge, ARM, Intel, were both plagued by Meltdown and other security issues. So if I were a business, small or big, I would still be banking on AMD CPU's personally.
Posted on Reply
#21
seronx
Time to escape from ARM, and flee to RISC-V!
Posted on Reply
#22
lexluthermiester
seronx
Time to escape from ARM, and flee to RISC-V!
Why? ARM isn't going to magically implode just because NVidia bought them.
Posted on Reply
#23
watzupken
illli
I feel like AMD is about to find itself in a difficult position. They are a small company compared to intel, and before AMD only had to contend with intel. Now they have to contend with both intel and Nvidia in the cpu market, which are both much larger. I think you'll soon see more inroads in desktop and laptop and servers with arm. I can see AMD being squeezed out more and they don't have other acquisitions to diversify with like intel and NV has (buying other companies over the years and branching out in other markets)
I feel it is too early to conclude. In my opinion, Nvidia actually don't stand to gain much technologically with the acquisition of ARM at this point. ARM IPs are meant to be open to anyone to license. In other words, one can just get the IPs to use the ARM cores, but not the GPU option. Nvidia will stand to benefit from utilizing ARM chips to bundle with their GPUs for AI, but this is not something that they can't do at the moment since they are anyway an ARM IP licensee.

In fact, I feel if anyone needs to worry, it's Intel really. Previously they only had to contend with AMD which is a much smaller company. Now, their dominance is not just challenged by AMD, but also ARM. Even before Nvidia acquired ARM, there are already multiple companies creating their own SOCs with ARM chips to replace what was previously Intel processors. And with the success of AMD EPYC, their market share is getting chipped away even more. AMD in the first place don't have much of a market share in the enterprise segment, so any gains in market share is a win for them. Intel with the lion's share in the same segment, is slowly seeing those numbers declining and bear in mind that this is the most lucrative segment where Intel charges the most.
Posted on Reply
#24
biffzinker
lexluthermiester
While true, that is based on an evolution of the Maxwell platform. Turing/Ampere are something else entirely. Just not seeing that happen anytime soon unless NVidia got into ARM for desktops. God help Intel if they do..
I think you mixed up NVIDIA’s GPU arch’s with ARM Holdings CPU arch. I was just pointing out NVIDIA will soon have the high performance CPU they’ve needed from ARM to pair with their high compute GPUs.
Posted on Reply
#25
lexluthermiester
biffzinker
I think you mixed up NVIDIA’s GPU arch’s with ARM Holdings CPU arch.
Not really. The Tegra X1 you referred to is a combined ARM CPU+Refined Maxwell GPU variant in one SOC.
biffzinker
I was just pointing out NVIDIA will soon have the high performance CPU they’ve needed from ARM to pair with their high compute GPUs.
Good point.
Posted on Reply
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