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

#26
renz496
lexluthermiester
It's not like they can't afford it. In fact Intel might welcome the influx of money.
Nope. Intel has been doing everthing in their power so x86 remain on existing player. To the point they wiling to sour the initial cross licensing deal they made with nvidia in 2004 just because they saw some glimpse about nvidia interest in making their own x86 based cpu. If intel wiling to license x86 to nvidia they then the settlemen in 2011 would not mention "nvidia parmenently barred from any form of x86 licensing".
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#27
Ashtr1x
Son looked at his failure of WeWork and probably has been forced to go through this, giving up ARM in a competitive mobile era is bad decision esp Japan lost Toshiba's Memory to Kioxia, probably Sony is one top still left but they are not a tech corporation. Nvidia will gain a lot through this, now they can create a full chip for their AI industry plus a win for licensing costs from Apple and others. Huang did a smart move.
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)
This ARM is not going to replace the Server market. It's not possible, the Software ecosystem is huge that cannot change anytime soon, AMD EPYC is very successful product and with new Milan it's going to wipe the floor with Xeon, So x86 is not going anywhere esp looking at Intel having already prepared for the AMD onslaught on the consumer DIY space and DC markets plus the most important thin and light bga trash market as well. Qualcomm's 8cx is not going to achieve anything over a U series Ryzen or Intel's new Tiger Lake. Plus Qualcomm abandoned their ARM server dreams and Marvell is going custom instead of the off shelf ARM parts for the markets and there are no other big players, Altera has to prove it and you have Nuvia which is all magical smoke for now & AWS Graviton 2 won't replace their EPYC and XEON, it's that usual Amazon's business of getting into everything (Lumberyard engine for games, Twitch, Amazon Originals etc) and also have a cheaper options for low end EC2 HW & Apple is only catering for their own loyal customer base where Mac is also devolved into looking like a mobile UX and will be a hybrid OS plus now the SoC from A series which is not going to impact the MS Windows / Linux or Datacenter RHEL. And imho ARM is always custom B.S one cannot simply run any software or OS just like that unlike on an x86 hardware, the OS needs blobs and proprietary drivers (at-least on Android). So AMD is not going to feel any heat from ARM or Nvidia on the CPU side, nor Intel is going to feel, they must innovate on the Lithography now to keep up that's all. Both x86 giants will be going the Big Little too soon, Intel already has it, AMD will also venture as per patents and that will take thin and light garbage in the future.
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#28
biffzinker
lexluthermiester
Tegra X1
The Cortex-X1 has nothing to do with NVIDIA’s Tegra X1. The Cortex-X1 is a recent high performance quad core architecture design to license from ARM. The Tegra X1 is still using ARM’s Cortex-A57 cores.
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#29
BorisDG
lynx29
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.
They have issues aswell. Google it

p.p. You have nice imaginary PC build btw.
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#30
Khonjel
I'm just wondering if this will become Nvidia's "AMD buying ATi" kinda moment.
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#31
TheLostSwede
The transaction does not include Arm's IoT Services Group.
It's starting already...
Nvidia isn't interested in a lot of what ARM has been doing, so I wonder what else they'll either sell off, be forced to part with due to government regulation for this deal to close and what they'll simply just stop developing due to cost related issues.

ARM will never be the same after this, that's for sure. I'm expecting Adreno to be gone first and foremost, as why would Nvidia want to use an AMD derived graphics IP in their products? They want to license their own graphics IP, despite the fact that they've proven it's inferior in terms of power usage if nothing else.

Then we'll see what else they throw out, most likely the video codecs will go as well. I hope they're sensible enough to keep the MCU cores, even though the focus here seems to be in "AI", Nvidia ought to be smart enough to realise they need those for the peripheral chipsets, or maybe they'll just consider that a job for someone else.

If you really start looking, you'll see there are ARM based cores in so many things. Even AMD's chipsets has an ARM core built into them...

It's definitely not a bright future ahead and Apple ought to take a big long look at the direction they're heading in.
Posted on Reply
#32
jeremyshaw
Khonjel
I'm just wondering if this will become Nvidia's "AMD buying ATi" kinda moment.
Nvidia's CEO did propose a merger with AMD back in 2005. He was a former CPU engineer working for AMD at one point in his career, before he cofounded Nvidia.

Of course, the AMD CEO (at that time) rejected that offer and decided to sink much of AMD's money into acquiring ATi above their (then-current) value. IMO, this dragged both down for almost a decade and allowed Intel to just gouge the market with increasingly expensive quad cores and a new motherboard socket every two years. Sometimes, this action was blatantly transparent (1151 two "incompatible" versions in particular). Nvidia and ATi were a bit more competitive, but it's not hard to see that fight as largely one-sided, too. Just not as bad.
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#33
TheLostSwede
jeremyshaw
Nvidia's CEO did propose a merger with AMD back in 2005. He was a former CPU engineer working for AMD at one point in his career, before he cofounded Nvidia.

Of course, the AMD CEO (at that time) rejected that offer and decided to sink much of AMD's money into acquiring ATi above their (then-current) value. IMO, this dragged both down for almost a decade and allowed Intel to just gouge the market with increasingly expensive quad cores and a new motherboard socket every two years. Sometimes, this action was blatantly transparent (1151 two "incompatible" versions in particular). Nvidia and ATi were a bit more competitive, but it's not hard to see that fight as largely one-sided, too. Just not as bad.
You're missing some 50% of this story, as AMD at the time screwed up a lot and didn't quite understand what they were buying. As such, they sold off profitable ATI business units to try and recuperate some of their investments in GPUs. ATI was actually a lot more than just a GPU company at the time. There was also quite a lot of management friction and some other issues that caused further problems, but my point is that it's not as simple as you're making it out to be either.
Posted on Reply
#34
R-T-B
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
You don't have a cellphone?
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.
MIPS is crying in a corner somewhere, if NVIDIA-ARM is mean they always have that option for cheap.
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#35
R0H1T
After the Wework disaster I guess Softbank didn't get the memo, this is an even bigger eff up :shadedshu: :wtf:
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#36
biffzinker
R-T-B
MIPS is crying in a corner somewhere, if NVIDIA-ARM is mean they always have that option for cheap.
The POWER ISA is another option if Apple wants to move back.
Posted on Reply
#38
renz496
TheLostSwede
It's starting already...
Nvidia isn't interested in a lot of what ARM has been doing, so I wonder what else they'll either sell off, be forced to part with due to government regulation for this deal to close and what they'll simply just stop developing due to cost related issues.

ARM will never be the same after this, that's for sure. I'm expecting Adreno to be gone first and foremost, as why would Nvidia want to use an AMD derived graphics IP in their products? They want to license their own graphics IP, despite the fact that they've proven it's inferior in terms of power usage if nothing else.

Then we'll see what else they throw out, most likely the video codecs will go as well. I hope they're sensible enough to keep the MCU cores, even though the focus here seems to be in "AI", Nvidia ought to be smart enough to realise they need those for the peripheral chipsets, or maybe they'll just consider that a job for someone else.

If you really start looking, you'll see there are ARM based cores in so many things. Even AMD's chipsets has an ARM core built into them...

It's definitely not a bright future ahead and Apple ought to take a big long look at the direction they're heading in.
Why would adreno be gone? Adreno is owned by Qualcomm not ARM.
Posted on Reply
#39
DeathtoGnomes
well, I guess we now know who is pushing for Skynet...
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#41
R0H1T
No it's quite possible, Nvidia may force Geforce on other licensees.
Posted on Reply
#42
R-T-B
biffzinker
The POWER ISA is another option if Apple wants to move back.
Always, of course. But I think apple is still salty they couldn't make a laptop version of the PPC970 AKA G5 processor.

MIPS is a better candidate for lowpower devices like Apple seems to love.
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#43
R0H1T
You can never say never with the leather jacket!
Posted on Reply
#44
john_
This can end up two ways.

Nvidia is throwing money and innovation in the ARM platform without trying to find ways to lock it. The ARM platform becomes the main CPU architecture in 10-15 years (or less?), covering from high efficiency simple cores for IOT, to high performance, but less efficient cores for HPCs, AI and gaming. Nvidia is the new Intel. Nvidia can offer from a simple smartwatch to a supercomputer ALL with Nvidia technologies/hardware in it. Intel (and AMD?) are left in the dust.

Nvidia plays nice in the beginning, but starts doing it's things gain. It keeps the best ARM CPU cores and technologies for itself, makes life for other companies much harder, forcing them to start searching for alternatives like RISC-V. ARM architecture is dead in 10-20 years.
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#45
Vya Domus
The transaction does not include Arm's IoT Services Group.
That's really odd and confirms a lot of concerns people had, it shows they have little interest in ARM's main mobile technology domain and that they are after something else.

It was a good run, ARM showed that mobile computing didn't have to be absolute crap, I don't even want to know what will follow in the next few years.
john_
This can end up two ways.

Nvidia is throwing money and innovation in the ARM platform without trying to find ways to lock it. The ARM platform becomes the main CPU architecture in 10-15 years (or less?), covering from high efficiency simple cores for IOT, to high performance, but less efficient cores for HPCs, AI and gaming. Nvidia is the new Intel. Nvidia can offer from a simple smartwatch to a supercomputer ALL with Nvidia technologies/hardware in it. Intel (and AMD?) are left in the dust.

Nvidia plays nice in the beginning, but starts doing it's things gain. It keeps the best ARM CPU cores and technologies for itself, makes life for other companies much harder, forcing them to start searching for alternatives like RISC-V. ARM architecture is dead in 10-20 years.
Oh I wonder which will be it. Hmm ...
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#46
dicktracy
X86 days are nearing its end. Good riddance.
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#47
VulkanBros
Doesn't make sense - didn´t nVidia move to RISC-V for there GPU controller design? I read that somewhere in 2015 or 2016........I think, could be wrong tho.....
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#48
stimpy88
This will be very bad for the industry. There are some very good reasons why nVidia is known to be hard to work with.

I don't understand why Apple did not buy ARM, as Apple and nVidia do not get on, and nVidia will not make things easy for Apple going forward. I wonder if Apple have some kind of protection from whatever happens to ARM?
Posted on Reply
#49
thevoiceofreason
jeremyshaw
Nvidia's CEO did propose a merger with AMD back in 2005. He was a former CPU engineer working for AMD at one point in his career, before he cofounded Nvidia.

Of course, the AMD CEO (at that time) rejected that offer and decided to sink much of AMD's money into acquiring ATi above their (then-current) value. IMO, this dragged both down for almost a decade and allowed Intel to just gouge the market with increasingly expensive quad cores and a new motherboard socket every two years. Sometimes, this action was blatantly transparent (1151 two "incompatible" versions in particular). Nvidia and ATi were a bit more competitive, but it's not hard to see that fight as largely one-sided, too. Just not as bad.
If AMD didn't purchase ATi back then they would be gone today. Their custom SoC business (PS4, Xbox One) is what kept the company afloat in the Bulldozer days.
Posted on Reply
#50
Vya Domus
stimpy88
I don't understand why Apple did not buy ARM, as Apple and nVidia do not get on, and nVidia will not make things easy for Apple going forward.
It would have been the same thing, both companies would have had a vested interest in hindering everyone else through this acquisition. Probably even more so Apple, who could have practically ended every other competitor in the snap of a finger by shutting down all licenses to them.
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