Nvidia Intends to Finance the Acquisition of ARM

NVIDIA acquires Arm

NVIDIA acquires CPU design company Arm for $40 billion

"AI is the most powerful technology force of our time and has launched a new wave of computing", Jensen Huang, NVIDIA's CEO, said in a statement.

However, while a handful of options exist such as other open-source technologies RISC-V and MIPS, most can not now compete with Arm's mature ecosystem, tech experts said. That, combined with the fact that the majority of the price will be paid in Nvidia stock (up 5% at time of writing on the news, having already doubled this year), means this deal has to be about more than just SoftBank covering its speculative positions.

The deal, announced overnight, drew criticism from Hermann Hauser, a co-founder of Arm who said in an interview it would spell disaster for Cambridge, Britain and Europe. Nvidia and Softbank announced today that they have reached a final agreement on the acquisition of ARM.

If the company's British character and open business model could not be protected, it would be better for Mr. Johnson to back a flotation on the London Stock Exchange, Mr. Hauser said. SoftBank owns three-quarters of Arm, and the Vision Fund, in which SoftBank has a big stake along with the sovereign-wealth funds of Saudi Arabia and Abu Dhabi, owns a quarter.

It added that the deal would create "the premier computing company for the age of artificial intelligence" (AI). Nvidia will also issue $1.5 billion in shares to Arm employees.

There are concerns the deal would see Arm's decision making taking place in the US. As part of the deal, Nvidia is forking over $US21.5 ($30) billion in stock, and $US12 ($16) billion in cash, of which $US2 ($3) billion will be handed over at signing. It remains to be seen how competitors take to the news, though industry analyst Geoff Blaber told The Guardian that the deal would "rightly face huge opposition".

The chief executives of Nvidia and Arm told Reuters in an interview that Nvidia will retain Arm's United Kingdom headquarters - which exempt it from many USA export control laws - and open licensing model. Learning from data, AI supercomputers can write software no human can.

Nvidia will build on Arm's R&D presence in the United Kingdom, establishing a new global center of excellence in AI research at Arm's Cambridge campus.

Huawei's Hisilicon chip unit used Arm designs to build its Kirin chips before Washington's trade restrictions on the Chinese company crippled the division, while Unisoc, a chipmaker owned by China's state-backed tech conglomerate Tsinghua Unigroup, counts on the company's blueprints. While a focus of the call was how NVIDIA could leverage Arm's network to work with manufacturers, Huang left the door open for NVIDIA GPU technology being used in smartphones in the future. The company's business centers on designing chips and licensing the intellectual property to customers, rather than chip manufacturing, for which it relies on partners. Some recent Windows devices also use Qualcomm's Arm-based processors. The regulatory questions as to how the company will approach that responsibility are not unreasonable, but Nvidia is capable of addressing those concerns.

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