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Tuesday March 2nd, 2021 11:31PM

Nvidia to buy UK chipmaker Arm from Softbank in $40B deal

By The Associated Press

LONDON (AP) — U.S. graphics chip maker Nvidia said it plans to buy U.K.-based Arm Holdings in a deal worth up to $40 billion, in a move that would create a global industry powerhouse.

Nvidia and Arm’s parent company, Japanese technology giant SoftBank, announced the deal Sunday.

Nvidia is based in Santa Clara, California, and is best known for its graphics processing chips. Arm's chip designs power the vast majority of the world's smartphones and the company is renowned as an innovator in technology for connected devices, known as the “Internet of Things.” Arm centers its business on designing chips and licensing the intellectual property, especially in mobile computing, rather than chip manufacturing, for which it relies on partners.

Under the terms of the deal, NVIDIA will pay SoftBank $21.5 billion in stock and $12 billion in cash. SoftBank could earn a further $5 billion if Arm hits performance targets while Arm employees will get $1.5 billion worth of Nvidia shares.

SoftBank bought Arm for about $32 billion in 2016 in an effort to cement the Japanese company’s ambitions in advancing how various devices, including security cameras and household appliances, connect online and work together.

Nvidia CEO Jensen Huang said the company plans to keep Arm based at its headquarters in Cambridge, England, where it will build an artificial intelligence research center and hire more engineers.

“This isn’t about consolidation, this isn’t about cost savings," Huang told reporters.

Regulators in the U.K., China, the European Union and the United States will need to approve the deal, which will need about 18 months to complete, Nvidia said.

  • Associated Categories: Associated Press (AP), AP Business, AP Technology News
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