NVIDIA acquires Arm for $40 Billion

After weeks of rumors we have already closed the acquisition of Arm by NVIDIA for a sum of 40 billion dollars, an astronomical figure for one of the agreements that transforms NVIDIA into the giant of processors. The acquisition has yet to pass the approval of the competition courts to be closed.

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The key points of this agreement already indicate how NVIDIA is going to focus its efforts mainly on the AI sector, a business of the future and with a high profit margin today. On the other hand, we see how it will maintain the open licensing model and supposedly neutrality in order to sell Arm’s licenses to third parties as it has done up to now.

  • Unites NVIDIA’s leadership in artificial intelligence with Arm’s vast computing ecosystem to drive innovation for all customers

  • NVIDIA will expand Arm’s R&D presence in Cambridge, UK, by establishing a world-class AI research and education center, and building an Arm/NVIDIA-powered AI supercomputer for groundbreaking research

  • NVIDIA will continue Arm’s open-licensing model and customer neutrality and expand Arm’s IP licensing portfolio with NVIDIA technology

  • Immediately accretive to NVIDIA’s non-GAAP gross margin and EPS

  • Consideration of $40 billion to be met through a combination of NVIDIA shares and cash

As specified in the agreement, NVIDIA/Arm will focus on the AI sector and in particular on industries for the healthcare sector, robotics and autonomous cars. A Cambridge-based super computer with Arm processors will be created and all intellectual property will remain in the UK, which will undoubtedly help gain legal protection in this country. We will see what the future holds and where Arm-based computing is headed with this new push.

  • As part of NVIDIA, Arm will continue to operate its open-licensing model while maintaining the global customer neutrality that has been foundational to its success, with 180 billion chips shipped to-date by its licensees. Arm partners will also benefit from both companies’ offerings, including NVIDIA’s numerous innovations.

  • SoftBank and Arm are fully committed to satisfying the undertakings made by SoftBank when it acquired Arm in 2016, which are scheduled to complete in September 2021. Following the closing of the transaction, NVIDIA intends to retain the name and strong brand identity of Arm and expand its base in Cambridge. Arm’s intellectual property will remain registered in the U.K.

  • NVIDIA will build on Arm’s R&D presence in the U.K., establishing a new global center of excellence in AI research at Arm’s Cambridge campus. NVIDIA will invest in a state-of-the-art, Arm-powered AI supercomputer, training facilities for developers and a startup incubator, which will attract world-class research talent and create a platform for innovation and industry partnerships in fields such as healthcare, robotics and self-driving cars.

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