Nvidia confirms purchase of ARM for $ 40 billion

After several weeks of speculation, here’s the official announcement: this Sunday (13), the Nvidia confirmed the purchase of ARM. The deal will cost $ 40 billion the company. A portion will be paid in shares. Another, in cash. That is, if the transaction is approved by regulatory bodies, of course.

Nvidia - BGS 2018

Headquartered in Cambridge, England, ARM belonged to the Japanese group SoftBank since 2016. In July of that year, the conglomerate disbursed US $ 32 billion for the business. The objective was not only to maintain the architectural licensing model that is the basis of ARM’s operations, but also to advance the group in areas such as artificial intelligence.

However, in the following years, SoftBank faced financial problems, largely due to the disastrous investments directed at WeWork. The sale of ARM is a way to recover cash and reduce the group’s exposure to the risks of such a sophisticated business – SoftBank has no experience in the semiconductor segment.

At the same time, the purchase is expected to further strengthen Nvidia. The company is already experiencing a good moment. This year, it became the most valuable semiconductor company in the United States, announced the promising series of RTX 3000 graphics cards and closed its last fiscal quarter with a profit of $ 622 million.

The newly announced deal is expected to open more doors for the company, allowing it to enter other segments of the semiconductor sector, for example.

Jensen Huang, CEO of Nvidia, has already made it clear that the acquisition is expected to reinforce the company’s participation in an industry in which it already has strength: artificial intelligence.

“In the coming years, trillions of computers running artificial intelligence will create an internet of things thousands of times larger than the internet for people we have today. Our combination [de tecnologias] it will create a fabulously positioned company for the AI ​​era, ”said the executive.

ARM

As if to reassure the market, Nvidia also tried to emphasize that ARM will remain based in Cambridge. In addition, plans are underway to build a research center in the UK focused on artificial intelligence. This project should culminate mainly in the creation of an AI supercomputer based on ARM technology.

The company also explained that ARM will maintain its architecture licensing model for companies in all parts of the world. License agreements could even be extended with the additional offering of Nvidia’s own technologies.

These statements show that ARM will be maintained as an independent business, at least for some time. This is, above all, a matter of caution: given the importance of ARM technologies for the market – the company’s architectures are present in cell phones, tablets, smartwatches and several other devices – the business will undergo rigorous analysis by regulatory authorities.

In that sense, keeping operations separate and signaling for ARM to remain an independent business should help Nvidia obtain approval. The purchase is subject to review by authorities in the United States, United Kingdom, European Union and China. The expectation is that the process will be completed within 18 months.

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