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

#76
bug
Zareek
Ngreedia owning ARM is not good for anyone but Ngreedia, hopefully government regulators find a legal way to axe this deal.
Super argument right there, how could anyone disagree with that?
Posted on Reply
#77
Vayra86
Has it occurred to anyone that ARM might be leaving the sinking UK ship right now? They keep some legalese and R&D over there, and that's it. That money flow is going elsewhere.

Not directly something to get excited about... this whole deal.
Posted on Reply
#78
Zareek
bug
Super argument right there, how could anyone disagree with that?
Just a statement, an opinion based on their more recent history(last 5 years or so). If it was Apple, I would say/think the same thing. In my opinion any major tech company acquiring ARM cannot be good for the consumer. We shall see, hopefully Nvidia recognizes the part that ARM plays in the technology eco system and doesn't ruin it.
Posted on Reply
#79
lexluthermiester
renz496
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".
A statement completely ignorant to reality and devoid of facts.
biffzinker
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.
Oops, I saw "X1" and thought of the wrong part.
Posted on Reply
#80
Assimilator
Zareek
Just a statement, an opinion based on their more recent history(last 5 years or so). If it was Apple, I would say/think the same thing. In my opinion any major tech company acquiring ARM cannot be good for the consumer. We shall see, hopefully Nvidia recognizes the part that ARM plays in the technology eco system and doesn't ruin it.
Opinions are like assholes, anyone can have them. And in that poster's case, their opinion is about as useful as an asshole: it doesn't contribute to the discussion around this topic in any way shape or form, nor is it particularly funny or clever. In other words, it's just noise, which the world can very much do without.
Posted on Reply
#81
tajoh111
This is probably good for ARM.

Arm barely makes any money and this has lead to layoffs of 10% of it's staff.

With softbank doing so poorly this year, this would have had even further negative impact on ARM's funding.

With ARM having 6000 employees while only spending 500 million on R and D, Nvidia will likely keep everyone employed while continue to hire as ARM progress has really stagnated over the years. We are still on ARM V8 which was released in 2011. The British government will be happy as long as Jobs are not lost. Not to mention the 1.5 billion in stock ARM employees are getting from this deal which is sure to please existing its workforce. Unlike most companies nowadays, including AMD, Nvidia has been mostly resistant about outsourcing it's workforce to countries like China and India in an effort to reduce labor costs.

For the workforce size, ARM is a bargain for Nvidia which is why it isn't a surprise they are expanding their UK headquarters.

This deal is also good for companies looking for a high performance GPU in the ARM space since most performance solutions are tied to a company because of vertical integration.
Posted on Reply
#82
theoneandonlymrk
Seems strange that the Iot division is Not included in the deal, I mean wtaf are they going to do, license the license to license IP? Whhuut.
Posted on Reply
#83
Assimilator
tajoh111
We are still on ARM V8 which was released in 2011.
No, we are on ARMv8.6-A which was released a year ago.
theoneandonlymrk
Seems strange that the Iot division is Not included in the deal, I mean wtaf are they going to do, license the license to license IP? Whhuut.
NVIDIA is already pretty deep into that space, presumably they looked at what Arm is doing there and didn't find it particularly great, so... snip. I imagine that any particularly good engineers from that department would be snapped up by big green after the fact.
Posted on Reply
#84
lexluthermiester
R-T-B
MIPS is crying in a corner somewhere, if NVIDIA-ARM is mean they always have that option for cheap.
True, or Risc-V.
Zareek
Ngreedia owning ARM is not good for anyone but Ngreedia
Opinion, and not a great one.
Zareek
hopefully government regulators find a legal way to axe this deal.
Not going to happen, the deal is already done. Government regulators either had no problem with this deal or they had no input as NVidia is not big enough to warrant scrutiny.
Posted on Reply
#85
Grigor
good news, Softbank just dont know what to do with ARM, even though i dont like arm
Posted on Reply
#86
moob
In regards to the folks wondering about what Apple's going to do, they, along with several other notable companies, have Architecture licenses with ARM and there's an assumption it's in perpetuity. I've been looking for concrete information on that but I'm coming up dry. Hopefully a tech site does a deep dive on all of this so we can get some clarity. I'm willing to believe that they do, as it would be very unlike Apple to put all of their eggs into a basket that was at such a high risk of being thrown off a cliff.
Posted on Reply
#87
Zareek
lexluthermiester
Not going to happen, the deal is already done. Government regulators either had no problem with this deal or they had no input as NVidia is not big enough to warrant scrutiny.
Actually that is what the 18 months is for, it's mentioned at the end of the article. Anti-trust and all that sort of thing...
Assimilator
Opinions are like assholes, anyone can have them. And in that poster's case, their opinion is about as useful as an asshole: it doesn't contribute to the discussion around this topic in any way shape or form, nor is it particularly funny or clever. In other words, it's just noise, which the world can very much do without.
And your rebuttal is not just more noise???

Sorry if I hurt anyone feelings saying something unkind about Nvidia. It personally pains me to see a company that I whole heartedly supported back in their early days take a turn for the worse over the past several years. GPP serves as a stellar example. Sorry if I don't feel confident in that same company taking control of ARM.
Posted on Reply
#88
bug
Grigor
good news, Softbank just dont know what to do with ARM, even though i dont like arm
I don't think Softbank was ever supposed to do anything with ARM, but let them do their job. Softbank is just an investor. They invested (presumably based on ARM's plans at the time), let ARM do their thing, and is now cashing in.
Posted on Reply
#89
awesomesauce
Pretty sure softbank is happy with the deal

Too much of heat with china over USA wanting to slowing them down with right to use any intel properties

Anyone know if china had any bitter or any chance to buy ARM ? or Allies didn’t want to?

I wounder what nvidia will do with china now.


i think china does’nt give a f*** and nvidia will need/try to poursuit latter someone.

or think china will go solo and mayem over technology race with huawei
Posted on Reply
#90
theoneandonlymrk
Assimilator
No, we are on ARMv8.6-A which was released a year ago.



NVIDIA is already pretty deep into that space, presumably they looked at what Arm is doing there and didn't find it particularly great, so... snip. I imagine that any particularly good engineers from that department would be snapped up by big green after the fact.
Yes so what are they going to. Do.

The Arm Iot spinoff I meant.
Posted on Reply
#92
steen
tajoh111
...Nvidia has been mostly resistant about outsourcing it's workforce to countries like China and India in an effort to reduce labor costs.
They have strong engineering presence in India, China, & Russia.
Posted on Reply
#93
rvalencia
iO
They'll design an arm core specifically for HPC use, to compete with AMD and Intel.
Next thing is using their sh!tload of money to port as much x86 software as they can to arm and by owning Mellanox they can offer complete servers with CPU, GPU, interconnect, networking and software stack as fully fledged packages...

Regarding Mali, they will gut all the good parts the uarch has to offer, integrate it into their own and then offer Geforce cores as the default GPU IP for arm designs.
FYI, Mellanox Technologies's top competitors include Samtec, Broadcom, Peregrine Semiconductor, Qorvo and Arista Networks.
steen
They have strong engineering presence in India, China, & Russia.
NVIDIA has 48 office locations across 22 countries. NVIDIA keeps its secret sauce.
Posted on Reply
#94
R0H1T
Zareek
Sorry if I hurt anyone feelings saying something unkind about Nvidia. It personally pains me to see a company that I whole heartedly supported back in their early days take a turn for the worse over the past several years. GPP serves as a stellar example. Sorry if I don't feel confident in that same company taking control of ARM.
Yeah I can't believe we're still having this debate o_O
However, during yesterday's briefing, Timothy Prickett Morgan from TheNextPlatform asked Jensen Huang, "Will you actually take an implementation of something like Neoverse first and make an Nvidia-branded CPU to drive it into the data center? Will you actually make the reference chip for those who just want it and actually help them run it?"

"Well, the first of all you've made an amazing observation, which is all three options are possible," Huang responded, "[...] So now with our backing and Arm’s serious backing, the world can stand on that foundation and realize that they can build server CPUs. Now, some people would like to license the cores and build a CPU themselves. Some people may decide to license the cores and ask us to build those CPUs or modify ours."
"It is not possible for one company to build every single version of them," Huang continued, "but we will have the entire network of partners around Arm that can take the architectures we come up with and depending on what's best for them, whether licensing the core, having a semi-custom chip made, or having a chip that we made, any of those any of those options are available. Any of those options are available, we're open for business and we would like the ecosystem to be as rich as possible, with as many options as possible."

Nvidia already builds some ARM-based processors for lower-power applications, but having access to ARM's engineering talent will undoubtedly speed the process of designing custom Nvidia data center chips. The company will also have overall control of the ISA, and it's unclear if Nvidia would be compelled to share all of the future ARM architecture innovations with ARM licensees.

During the call, Huang also said he wants to speed up the Neoverse roadmap to bring innovations to ARM licensees faster. Naturally, it would also be in Nvidia's best interest (at least in the short term) to broaden the ecosystem of ARM server chips, and that would require multiple options from a variety of chipmakers.


Nvidia could also drive Nvidia GPU-specific optimizations like CPU/GPU memory coherence into the ARM architecture, which would then incentivize other chip makers to use Nvidia's GPUs in their solutions. That approach could help solidify Nvidia's position as the premier AI solutions provider in the data center.
www.tomshardware.com/news/jensen-huang-hints-at-nvidia-branded-arm-cpus
As far as I am concerned all profit marking companies cannot & should not be trusted on their "word" & some more than others ~ Nvidia, Intel, Apple come to mind.
Posted on Reply
#95
fynxer
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
Not to worry, after your divorce and shared custody of the kids you will have plenty of time for doing that ARM build for gaming.

Just so you know I am speaking from experience.
Fouquin
Okay but this has nothing to do with gaming.
Hmmm, short sighted are we, ARM is already a gaming CPU in billions of devices.

Don't you think nvidia that hold 80% of the discrete gaming market will make a big splash if it makes really good, cheap and fast desktop ARM 16 core gaming CPU.

They could even transform the market and make modular graphics chip with a built in ARM 16 core gaming CPU that shares the same GFX memory much like the PS5 and XBOX X.

You must understand that the GPU is packed with incredibly much more power than a CPU, the CPU is becoming less important each year going forward, soon GPUs will become thousands of times faster than CPUs.

The CPU will end up as a simple controller chip in the future dominated by GPUs, why do you think Intel is rushing in to the GPU market, they see the writing on the wall.
Posted on Reply
#96
Shatun_Bear
Assimilator
ITT: people saying RISC-V is the future now that Arm is "dead". That's about as likely as Arm CPUs becoming competitive with x86 (sorry, Geekbench of Apple A13 beating Intel CPUs doesn't mean shit).



Rich coming from someone accusing others of not understanding how business works.



Because Apple hates competition.
So Apple would buy ARM in this hypothetical fantasy scenario of yours, then immediately cease all agreements for ARM partners to use its instruction set, somehow being allowed to do this by evading all laws against such practices. And the reason: because Apple hates competition.

Thanks, you've just proved to me you have the business understanding of a child.
Posted on Reply
#97
bug
Shatun_Bear
So Apple would buy ARM in this hypothetical fantasy scenario of yours, then immediately cease all agreements for ARM partners to use its instruction set, somehow being allowed to do this by evading all laws against such practices. And the reason: because Apple hates competition.

Thanks, you've just proved to me you have the business understanding of a child.
If Apple did buy ARM, I would expect them to go the way Microsoft went: insert undocumented instructions into future revisions of the arch, not covered by licensing.
But the point is moot now, no use speculating. Unless Apple buys Nvidia :P
Posted on Reply
#98
tigger
I'm the only one
Apple was a original partner in the development of ARM. wonder if they still have any part ownership?
Posted on Reply
#99
R0H1T
fynxer
Hmmm, short sighted are we, ARM is already a gaming CPU in billions of devices.

Don't you think NVIDIA that hold 80% of the discrete gaming market will make a big splash if it makes really good, cheap and fast desktop ARM 16 core gaming CPU.
No there's two big barriers for NVIDIA ever gaining a stronghold in the PC sector i.e. mainly CPUs. That's MS+x86 ~ which back in the day was called Wintel. It's still true today & apart from Apple no one comes close to matching AMD nor Intel in the top end desktop or enthusiast grade CPUs. Why am I even including Apple ~ because they have by far the best IPC among non x86 chipmakers & are basically going full (custom) ARM on their desktops as well as notebooks.

To ever gain a foothold in this space Nvidia will not only have to get close to if not beat Intel, AMD+MS but also do it cheaper, much cheaper. The chances of them pulling this off in this decade are slim if not nonexistent, the only they come close is to spend hundreds of billions trying to win over MS & other software developers besides executing on their CPU roadmap without fail.

Now the server space is completely different so there's a chance they may get better traction there. On the PC side of things I see the AMD, Intel duopoly continue unchallenged at least for the first half of this decade.
Posted on Reply
#100
Assimilator
Shatun_Bear
So Apple would buy ARM in this hypothetical fantasy scenario of yours, then immediately cease all agreements for ARM partners to use its instruction set, somehow being allowed to do this by evading all laws against such practices.
Read up on the term "escape clause", child. Hint: those have nothing to do with laws.
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