- General
- September 13, 2020
- 4 minutes read
Nvidia Said To Near $40 Billion Arm Buy
Nvidia CEO Jensen Huang. Photo credit: Nvidia Corporation Japanese technology conglomerate SoftBank is on the cusp of a deal to…
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| Nvidia CEO Jensen Huang.
Photo credit: Nvidia Corporation
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Japanese technology conglomerate SoftBank is on the cusp of a deal to sell Arm, the chip designer it acquired four years ago for $32 billion, for more than $40 billion to US-based chip company Nvidia, according to a report [paywall] by the Wall Street Journal. According to the Journal, SoftBank is set to sell Arm in a cash-and-stock deal that’ll value the company in the low $40 billions, marking a sizeable return for SoftBank’s $32 billion investment. Nvidia was first reported to in talks to acquire Arm back in July.
A $40 billion deal would mark one of the biggest ever seen in the chip industry. It would also mark Nvidia’s biggest acquisition, beating by far the company’s $7 billion acquisition of Mellanox Technologies, an Israeli computer networking products maker. Nvidia completed its acquisition of Mellanox just in April of this year and is apparently set for yet another big buy. According to the Journal, a formal Arm acquisition deal could be finalized as early as next week.
Arm designs the microprocessors that powers most of the smartphones globally. Nvidia, on the other hand, manufactures chips that are used to run intense computing calculations for graphics, an area that plays a major role in videogaming, cloud computing and related activities. Nvidia is already pretty big, with a market capitalization (as of writing) hovering at $300 billion. This year alone, the company’s shares have soared over 100%. A tie-up between Nvidia and Arm would create one of the biggest powerhouses in the chip industry and even possibly draw regulatory scrutiny as well as opposition from competitors and hardware makers who are major Arm customers.
Update: Nvidia has announced a formal deal to acquire Arm in a transaction valued at $40 billion. Nvidia is coughing up $21.5 billion in stock and $12 billion in cash for Arm, with an additional $5 billion in cash or stock payments earmarked for condition-based earnouts. Nvidia is also issuing $1.5 billion in equity to Arm employees as part of the deal.
