Nvidia to acquire Arm for $40bn, promises to keep its licensing business alive

UK to remain HQ as combined companies eye off cloud-to-edge AI stack

Nvidia has announced it will buy UK chip-designer Arm.

A Monday statement from Nvidia and Arm’s current owner SoftBank says the transaction will be valued at $40bn. Nvidia is not buying Arm's Internet-of-Things services, we note.

Arm will remain headquartered in the UK and its brand and business model will persist. Arm, which operated from an 'any core for any buyer' Switzerland-like neutral position in the industry, has effectively been bought by one of its customers, a move that is sending tremors through the semiconductor world.

There is overlap between Arm and Nvidia: both design graphics processors and machine-learning accelerators, though Arm aims these blocks of technology at battery-powered mobile devices primarily, whereas Nvidia sets its sights mainly on desktop rigs, workstations, and servers. Anything could happen in the next year in the Arm and Nvidia GPU space now.

Nvidia founder and CEO Jensen Huang penned a letter about the deal in which he said: “Arm’s business model is brilliant. We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand Arm’s IP licensing portfolio with Nvidia’s world-leading GPU and AI technology.”

Huang’s letter explained that Nvidia wants to extend its AI tech to wherever Arm-powered devices can be found. It also seems Nv is mostly keen on welding Arm's CPU cores to its own graphics and machine-learning compute engines.

AI “will expand computing to every corner of the globe. Someday, trillions of computers running AI will create a new internet — the internet-of-things — thousands of times bigger than today’s internet-of-people,” Huang said. “Uniting Nvidia’s AI computing with the vast reach of Arm’s CPU, we will engage the giant AI opportunity ahead and advance computing from the cloud, smartphones, PCs, self-driving cars, robotics, 5G, and IoT.”

An Nvidia graphics processor chip

Nvidia's data centre biz tops gaming as lead revenue source – and it should enjoy being king while it lasts


“Our R&D scale will turbocharge Arm’s roadmap pace and accelerates data center, edge AI, and IoT opportunities,” Huang added.

Which sounds a lot like Nvidia intends to build itself a cloud-to-edge AI-friendly stack, an ambitious undertaking if ever there was one!

Just $12bn of the $40bn headline price that will be cash for SoftBank, though the Japanese company will also score $21.5bn in Nvidia common stock – a sub-ten-percent stake. SoftBank can also earn $5bn more cash “subject to satisfaction of specific financial performance targets by Arm.” Arm employees will share $1.5bn in equity, which may be a handy incentive to keep its engineers and other staff on the payroll for a few more years.

Those in the UK will also have a shiny new “world-class AI research center in Cambridge” as a possible workplace.

“This Nvidia research center will be the home of a state-of-the-art AI supercomputer powered by Arm CPUs” and “will be a major attraction for scientists from around the world doing groundbreaking research in healthcare, life sciences, robotics, self-driving cars, and other fields,” Huang wrote. The new centre will also become Nvidia’s Euro-HQ “to collaborate with universities, industrial partners, and startups. It will also be the Nvidia Deep Learning Institute for Europe, where we teach the methods of applying this marvelous AI technology.”

Arm CEO Simon Segars put his name to canned quotes that stated: "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."

He added: “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.”

Don’t hold your breath waiting for ribbon-cuttings because SoftBank and Nvidia say the deal will take 18 months to close. Regulators will need to sign off on it, too.

SoftBank acquired Arm for $31bn in 2016. The direct consideration it will receive for the sale – $12bn in cash and $21.5bn in stocks, don't forget – represents an eight percent gain over four years during which major stock exchange indices have close to doubled. ®

Similar topics

Broader topics

Other stories you might like

  • Nvidia wants to lure you to the Arm side with fresh server bait
    GPU giant promises big advancements with Arm-based Grace CPU, says the software is ready

    Interview 2023 is shaping up to become a big year for Arm-based server chips, and a significant part of this drive will come from Nvidia, which appears steadfast in its belief in the future of Arm, even if it can't own the company.

    Several system vendors are expected to push out servers next year that will use Nvidia's new Arm-based chips. These consist of the Grace Superchip, which combines two of Nvidia's Grace CPUs, and the Grace-Hopper Superchip, which brings together one Grace CPU with one Hopper GPU.

    The vendors lining up servers include American companies like Dell Technologies, HPE and Supermicro, as well Lenovo in Hong Kong, Inspur in China, plus ASUS, Foxconn, Gigabyte, and Wiwynn in Taiwan are also on board. The servers will target application areas where high performance is key: AI training and inference, high-performance computing, digital twins, and cloud gaming and graphics.

    Continue reading
  • Restructure at Arm focused on 'non-engineering' roles
    Meanwhile, CEO wants to vacuum up engineering talent amid return to stock market

    Updated Arm today told The Reg its restructuring ahead of its return to the stock market is focused on cutting "non-engineering" jobs.

    This is after we queried comments made this morning by Arm chief executive Rene Haas in the Financial Times, in which he indicated he was looking to use funds generated by the expected public listing to expand the company, hire more staff, and potentially pursue acquisitions. This comes as some staff face the chop.

    This afternoon we were told by an Arm spokesperson: "Rene was referring more to the fact that Arm continues to invest significantly in its engineering talent, which makes up around 75 percent of the global headcount. For example, we currently have more than 250 engineering roles available globally."

    Continue reading
  • GPUs aren’t always your best bet, Twitter ML tests suggest
    Graphcore processor outperforms Nvidia rival in team's experiments

    GPUs are a powerful tool for machine-learning workloads, though they’re not necessarily the right tool for every AI job, according to Michael Bronstein, Twitter’s head of graph learning research.

    His team recently showed Graphcore’s AI hardware offered an “order of magnitude speedup when comparing a single IPU processor to an Nvidia A100 GPU,” in temporal graph network (TGN) models.

    “The choice of hardware for implementing Graph ML models is a crucial, yet often overlooked problem,” reads a joint article penned by Bronstein with Emanuele Rossi, an ML researcher at Twitter, and Daniel Justus, a researcher at Graphcore.

    Continue reading

Biting the hand that feeds IT © 1998–2022