The rumors are true. NVIDIA just announced that it will acquire ARM for $40 Billion.
NVIDIA CEO Jen-Hsun “Jensen” Huang said during a media conference this evening (Sept. 13, 2020), that the view is to build the 10s of trillions to 100s of trillions of computers that will be needed in the future. The merger will “turn ARM into a world class data center CPU”.
Based on NVIDIA’s gigantic commitment to supporting ARM, Jensen observed, “It became clear that the world can stand on the ARM foundation”.
It looks like a win-win. Customers will be happy that NVIDIA will maintain ARM open licensing while the UK will be happy that ARM will continue bringing jobs to the UK. ARM is registered in the UK and Jensen said the business plus Cambridge R&D will remain there.
Expect a tremendous shakup in the HPC and enterprise data center market once the sale is complete. Jensen noted that there are going to be so many types of data centers in the future, gigantic ones, high-power (e.g. HPC) ones, and small local data centers. They will be managed like fleets. It’s not possible for one company to build every version. A key advantage of the merger will be the consistency of the software stack from CPU to GPU to fabric.
Jensen noted that at this time there was no way to call the timing for the regulatory approval.
Even with that uncertainty, it is clear that the ARM acquisition gives NVIDIA everything it needs to carry through its desire to broaden its reach as a premier global technology company encompassing ARM CPUs, NVIDIA GPUs, Mellanox fabric, and a proven software stack on all platforms. The goal is to “expand computing tremendously and come up with the architectures that other companies can use to build amazing servers.”
In a word, “Superlative!”
Additional Transaction Details
Under the terms of the transaction, 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. The number of NVIDIA shares to be issued at closing is 44.3 million, determined using the average closing price of NVIDIA common stock for the last 30 trading days. 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.
NVIDIA intends to finance the cash portion of the transaction with balance sheet cash. The transaction does not include Arm’s IoT Services Group.