NVIDIA and SoftBank Group Corp. (SBG) announced today a definitive agreement in which NVIDIA will acquire Arm Limited from SBG and the SoftBank Vision Fund (together, “SoftBank”) in a transaction valued at $40 billion.
Announced via press release, the combination brings together NVIDIA’s leading AI computing platform with Arm’s vast ecosystem to create the premier computing company for the age of artificial intelligence, accelerating innovation while expanding into large, high-growth markets. SoftBank will remain committed to Arm’s long-term success through its ownership stake in NVIDIA, expected to be under 10 percent.
“AI is the most powerful technology force of our time and has launched a new wave of computing,” said founder and CEO of NVIDIA, Jensen Huang. “In the years ahead, trillions of computers running AI will create a new Internet-of-Things that is thousands of times larger than today’s internet-of-people. Our combination will create a company fabulously positioned for the age of AI.”
Huang added, “Simon Segars and his team at Arm have built an extraordinary company that is contributing to nearly every technology market in the world. Uniting NVIDIA’s AI computing capabilities with the vast ecosystem of Arm’s CPU, we can advance computing from the cloud, smartphones, PCs, self-driving cars and robotics, to edge IoT, and expand AI computing to every corner of the globe.”
CEO of Arm, Simon Segars echoed this sentiment, saying, “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.” Segars added, “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.”
Under the terms of the deal, which has been approved by the boards of directors of NVIDIA, SBG and Arm, NVIDIA will pay to SoftBank a total of $21.5 billion in NVIDIA common stock and $12 billion in cash, which includes $2 billion payable at signing. Additionally, SoftBank may receive up to $5 billion in cash or common stock under an earn-out construct, subject to satisfaction of specific financial performance targets by Arm.
NVIDIA will also issue $1.5 billion in equity to Arm employees. Arm will remain headquartered in Cambridge; NVIDIA plans to expand on the site and build a “world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields.”
The deal is set to close in approximately 18 months.