NVIDIA to Purchase Arm for $40 Billion, Creating World’s Premier Computing Firm for the Age of AI – Drones Information
- Combines NVIDIA’s leadership in artificial intelligence with Arm’s extensive computing ecosystem to drive innovation for all customers
- NVIDIA will expand Arm’s research and development presence in Cambridge, UK by establishing a world-class AI research and education center and building an Arm / NVIDIA-based AI supercomputer for groundbreaking research
- NVIDIA will continue Arm’s open licensing model and customer neutrality and add NVIDIA technology to Arm’s IP licensing portfolio
- Immediate increase in NVIDIA’s Non-GAAP Gross Margin and EPS
- $ 40 billion consideration through a combination of NVIDIA stock and cash
NVIDIA and SoftBank Group Corp. (SBG) today announced a definitive agreement to acquire NVIDIA Arm Limited from SBG and SoftBank Vision Fund (collectively, “SoftBank”) for a value of $ 40 billion. The transaction is expected to have an immediate positive impact on NVIDIA’s non-GAAP gross margin and non-GAAP earnings per share.
The combination brings together NVIDIA’s leading AI computing platform and Arm’s vast ecosystem to create the leading computing company for the artificial intelligence age that accelerates innovation while expanding into large, high-growth markets. SoftBank will remain committed to Arm’s long-term success through its stake in NVIDIA, which is expected to be less than 10 percent.
“AI is the most powerful technology force of our time and has sparked a new wave of computers,” said Jensen Huang, founder and CEO of NVIDIA. “In the years to come, trillions of computers running AI will create a new Internet of Things that is a thousand times bigger than today’s Internet of People. Our combination will create a company that is well positioned for the age of AI.
“Simon Segars and his team at Arm have built an extraordinary company that contributes to nearly every technology market in the world. By combining NVIDIA’s AI computing capabilities with the vast Arm CPU ecosystem, we can advance computing from the cloud, smartphones, PCs, self-driving cars, and robotics, improve the Internet of Things, and bring AI computing to everyone Expand parts of the world.
“This combination has enormous advantages for companies, our customers and the industry. For Arm’s ecosystem, the combination will boost Arm’s research and development capacity and expand its IP portfolio with the world’s leading GPU and AI technology from NVIDIA.
“Arm will continue to be headquartered in Cambridge. We’re going to expand this great site and build a world-class AI research facility supporting developments in healthcare, life sciences, robotics, self-driving cars, and more. To attract researchers and scientists from the UK and around the world to do 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 lived up to our commitments and invested heavily in people, technology, and research and development to expand the business into new areas with high growth potential. Working with a world leader in technological innovation creates new and exciting opportunities for arm. This is a compelling combination that puts Arm, Cambridge and the UK at the forefront of some of the most exciting technological innovations of our time. Therefore, 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 problems, from climate change to health care, from agriculture to education,” said Simon Segars, CEO of Arm. “Achieving this vision requires new approaches to hardware and software and a long-term commitment to research and development. By bringing the technical strengths of our two companies together, we can accelerate our progress and create new solutions that 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 the poor and the UK
As part of NVIDIA, Arm will continue to operate its open licensing model while maintaining the global customer neutrality that is fundamental to its success. To date, 180 billion chips have been shipped by its licensees. Arm partners will also benefit from the offerings of both companies, including NVIDIA’s numerous innovations.
SoftBank and Arm are committed to meeting the commitments SoftBank made in acquiring Arm in 2016, which are expected to be completed in September 2021. Upon completion of the transaction, NVIDIA intends to maintain Arm’s name and strong brand identity and expand its base in Cambridge. Arm’s intellectual property remains registered in the UK.
NVIDIA will build on Arm’s research and development presence in the UK and establish a new global center of excellence for AI research on Arm’s campus in Cambridge. NVIDIA will invest in a state-of-the-art arm-powered AI supercomputer, developer training facilities and a startup incubator that will attract world-class researchers and create a platform for innovation and industrial partnerships in areas such as healthcare, robotics and self-driving cars.
Additional transaction details
As part of the transaction, approved by the boards of NVIDIA, SBG and Arm, NVIDIA will pay SoftBank a total of $ 21.5 billion in NVIDIA common stock and $ 12 billion in cash, including $ 2 billion in cash Signature are payable. The number of NVIDIA shares to be issued at the time of closing is 44.3 million. It is calculated based on the average closing price of NVIDIA common shares over the last 30 trading days. In addition, SoftBank can earn up to US $ 5 billion in cash or common stock under an earn-out scheme, provided Arm meets certain financial performance targets.
NVIDIA will also provide $ 1.5 billion in equity to Arm employees.
NVIDIA intends to fund the cash portion of the transaction with on-balance sheet cash. The transaction does not include Arm’s IoT Services Group.
The proposed transaction is subject to customary closing conditions, including obtaining regulatory approvals for the United Kingdom, China, the European Union and the United States. The transaction is expected to close in approximately 18 months.
Conference call and webcast details
NVIDIA will host a webcast on Monday, September 14th at 5:30 am to discuss the transaction. The webcast is available on NVIDIA’s Investor Relations website at https://investor.nvidia.com/. A webcast replay and a copy of the webcast presentation materials are also available at https://investor.nvidia.com/.