Nvidia Confirms $40B Purchase Of Arm

Nvidia has confirmed that it intends to buy UK-based computer chip design giant Arm Holdings for a total of up to $40 billion from SoftBank.

In the deal's transaction details, NVIDIA will pay SoftBank a total of $21.5 billion in NVIDIA common stock and $12 billion in cash, including $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 the satisfaction of Arm's specific financial performance targets. NVIDIA will also issue $1.5 billion in equity compensation for existing Arm employees to Arm employees.

Nvidia's market capitalization has skyrocketed to over $300 billion lately, partly due to recent success in artificial intelligence applications. The deal will allow Nvidia to develop its AI computing platform further to reach more devices and applications in the upcoming term. "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," Nvidia states and adds "For Arm's ecosystem, the combination will turbocharge Arm's R&D capacity and expand its IP portfolio with NVIDIA's world-leading GPU and AI technology."

The deal will also provide swift cash to SoftBank since they lately reported a stunning $18 billion loss at its giant Vision Fund.