Nvidia buying ARM for record-breaking $40 billion
After weeks of speculation, Nvidia has announced that it has agreed to buy SoftBank's ARM for $40 billion dollars, making it the largest chip manufacturer deal in history.
The deal was announced late on Sunday evening. Nvidia will pay $12 billion in cash, for ARM, with $2 billion due at deal signing. Nvidia will also need to shell out $21.5 billion in stock. Employees of ARM will get $1.5 billion ion Nvidia stock.
"AI is the most powerful technology force of our time and has launched a new wave of computing," said Jensen Huang, founder and CEO of NVIDIA. "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."
"This combination has tremendous benefits for both companies, our customers, and the industry," Huang added. "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.
ARM will remain in Cambridge, UK. Huang says that the facility will be expanded into a "world-class AI research facility" with the goal of attracting researchers from across the world.
Nvidia is planning on building an AI supercomputer, powered by ARM technologies.
Softbank acquired ARM in 2016 for $32 billion. Softbank CEO Masayoshi Son had been working on the blockbuster deal with a small team of executives, including ARM CEO Simon Segars, CFO Yoshimitsu Goto, Vision Fund CEO Rajeev Misra, and Vision Fund executive Akshay Naheta.
"NVIDIA is the perfect partner for Arm," said Masayoshi Son, chairman and CEO of SoftBank. "Since acquiring Arm, we have honored our commitments and invested heavily in people, technology and R&D, thereby expanding the business into new areas with high growth potential. Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm. This is a compelling combination that projects Arm, Cambridge and the U.K. to the forefront of some of the most exciting technological innovations of our time and is why SoftBank is excited to invest in Arm's long-term success as a major shareholder in NVIDIA. We look forward to supporting the continued success of the combined business."
While the deal has been approved by the boards of directors of ARM, SoftBank, and Nvidia, the deal isn't final. It still needs to jump regulatory hurdles not just in the US, but in China, The European Union, and the UK as well. The deal may hit regulatory hurdles, as ARM licenses its technology to many other companies, including Apple, AMD, Intel, and Qualcomm, and Nvidia's control over a vital license that its competitors need would raise questions by critics if the deal goes through.
Initial reports on a possible sale of ARM alleged Apple was approached for a potential role in the buyout. As Apple licenses the ARM chip architecture used in its A-series SoCs, it seemed plausible for Apple to have an interest, but report sources suggested it would be a poor fit with the rest of the company's business structure.
While the A-series processor, and Apple Silicon are ARM-based, Apple does not need ARM to exist as an independent entity to advance the processors. In all likelihood, given ARM's sale, Apple will diverge more and more from "vanilla" ARM than it has now, as time progresses.
A purchase of ARM by Nvidia will give the graphics chip producer access to more patents and intellectual property to enhance its own offerings, as well as giving itself more of an opening to move deeper into processor sales.
Nvidia will be providing more information about the deal on Monday evening in a conference call.
The deal was announced late on Sunday evening. Nvidia will pay $12 billion in cash, for ARM, with $2 billion due at deal signing. Nvidia will also need to shell out $21.5 billion in stock. Employees of ARM will get $1.5 billion ion Nvidia stock.
"AI is the most powerful technology force of our time and has launched a new wave of computing," said Jensen Huang, founder and CEO of NVIDIA. "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."
"This combination has tremendous benefits for both companies, our customers, and the industry," Huang added. "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.
ARM will remain in Cambridge, UK. Huang says that the facility will be expanded into a "world-class AI research facility" with the goal of attracting researchers from across the world.
Nvidia is planning on building an AI supercomputer, powered by ARM technologies.
Softbank acquired ARM in 2016 for $32 billion. Softbank CEO Masayoshi Son had been working on the blockbuster deal with a small team of executives, including ARM CEO Simon Segars, CFO Yoshimitsu Goto, Vision Fund CEO Rajeev Misra, and Vision Fund executive Akshay Naheta.
"NVIDIA is the perfect partner for Arm," said Masayoshi Son, chairman and CEO of SoftBank. "Since acquiring Arm, we have honored our commitments and invested heavily in people, technology and R&D, thereby expanding the business into new areas with high growth potential. Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm. This is a compelling combination that projects Arm, Cambridge and the U.K. to the forefront of some of the most exciting technological innovations of our time and is why SoftBank is excited to invest in Arm's long-term success as a major shareholder in NVIDIA. We look forward to supporting the continued success of the combined business."
While the deal has been approved by the boards of directors of ARM, SoftBank, and Nvidia, the deal isn't final. It still needs to jump regulatory hurdles not just in the US, but in China, The European Union, and the UK as well. The deal may hit regulatory hurdles, as ARM licenses its technology to many other companies, including Apple, AMD, Intel, and Qualcomm, and Nvidia's control over a vital license that its competitors need would raise questions by critics if the deal goes through.
Initial reports on a possible sale of ARM alleged Apple was approached for a potential role in the buyout. As Apple licenses the ARM chip architecture used in its A-series SoCs, it seemed plausible for Apple to have an interest, but report sources suggested it would be a poor fit with the rest of the company's business structure.
While the A-series processor, and Apple Silicon are ARM-based, Apple does not need ARM to exist as an independent entity to advance the processors. In all likelihood, given ARM's sale, Apple will diverge more and more from "vanilla" ARM than it has now, as time progresses.
A purchase of ARM by Nvidia will give the graphics chip producer access to more patents and intellectual property to enhance its own offerings, as well as giving itself more of an opening to move deeper into processor sales.
Nvidia will be providing more information about the deal on Monday evening in a conference call.
Comments
ElijahG basically summarized the ARM/Apple arrangement.
In a sense, they can do whatever they want, without having a transition phase hence forth.
The real question is regarding the nature of Apple’s license. Does it cover all future versions? Can nVidia claim ARMv9 is not part of that license? Unlikely, but that’s the question Apple needs to know. I’m sure if this were a concern, Apple would have made a bid for ARM themselves. I am concerned that Apple doesn’t have a good relationship with nVidia. Hopefully, that’s a non-issue.
what happens if ARM employees are rolled into NVIDEA teams and future versions are called NVIDEA instruction sets?
By definition, a perpetual license for the ISA would cover all future versions, and while ARM may very well have a maintenance fee structure in place with Apple to maintain that license in perpetuity, it is more likely that Apple negotiated and paid a lump sum for that perpetual license.
Apple has deviated from the ISA at least since the A7 SOC, and again by definition, Apple would have created a superset of the ISA, which would be proprietary to Apple. I can't imagine that this would have any noticeable impact on the virtualization of Linux. though it might require some small effort.
It is conceivable that in the future, Nvidia might attempt to increase licensing fees "unreasonably", or deprecate all external licensing, leading to a hellscape of legal jeopardy, which would ultimately lead, I suspect, to an external caretaker that would take over management of the ARM operation. That seems unlikely to happen.
Again, by definition, Apple would have guarantees and penalties written into any contracts that they would have enjoined with ARM. That's what Apple's legal department is for.
I'm also starting to worry about this statement:
Are they really saying that their future chips sold to us will be running Nvidia's AI software even when we are using them? This opens up a can of worms. Will Nvidia let us opt out? Or will it be an opt in? Will Nvidia tell us what software they are running on our computers? Will Nvidia be able to see my computer's screen? Will I be able to see Nvidia's software running using my computer's "task manager"? Will the computations be sent across international borders? Will Nvidia be paying us for the use of our computers? Will Nvidia be tracking any personal data like unique computer IDs? Will Nvidia be giving access to my computer to law enforcement with a warrant?
I don't think I want Nvidia or anyone else knowing what's in my house or what internet-of-things devices are in my house, let alone controlling what my processors are running. This is exactly the kind of thinking by companies like Google/Facebook that has made Apple a two trillion dollar company because some people actually value Apple's attitudes toward privacy and security.
Good grief.
I was just going to type everything you just said. You've pretty much nailed it.
The important point is that any attempt to extract further fees from the perpetual licensees would wreak havoc throughout the industry and would land Nvidia in multiple courts facing multiple lawsuits.
The only thing that Apple gets from ARM is the spec for the instruction set and a set of compatibility tests to make sure that their instruction set will still run basic ARM instructions. To break this, Nvidia would have to break the instruction set for everyone, which would have very little effect on Apple, since the only thing they need compatibility for is virtualisation and containers, but would cause an industry meltdown.
If the ARM sale represented a problem, then Apple would have bought it when they were offered first refusal. They could've let it carry on as an independent entity (much as they do with Filemaker), raking in license fees. The fact that they chose not to demonstrates how far ASi is dependence on ARM.
"This process will take months if not years with a high chance of failure," he told the BBC."
"A source at one U.S. company using Arm designs said the move would likely accelerate an industry shift already under way from Arm designs to RISC-V. “This will only intensify that,”
"Co-founder of Arm attacks sale to Nvidia as a 'disaster'
By Reuters Staff
2 Min Read
LONDON (Reuters) - The $40 billion sale of British chip designer Arm to Nvidia Corp NVDA.O from Japan's SoftBank 9984.T is a disaster that will destroy its business model, Arm's co-founder said on Monday.
“It’s a disaster for Cambridge, the UK and Europe,” Hermann Hauser told Reuters in an interview. “It’s the last European technology company with global relevance and it’s being sold to the Americans.”
The deal announced overnight would destroy Arm’s business model as “the Switzerland of the semiconductor industry”, Hauser said. Nvidia competes with Arm’s clients.
Hauser called on the UK government to put three conditions on the deal: a guarantee of jobs in Britain; a promise to preserve ARM’s open business model; and an exception to U.S. security reviews on its client relationships.
If these could not be met, “the British government should help orchestrate an initial public offering of ARM on the London Stock Exchange and make it a British company”, Hauser said, urging the UK to back a market float as a cornerstone investor."