One more step for NVIDIA in AI with the acquisition of ARM for $40 billion

It was to be expected, the American giant NVIDIA has just bought ARM for a record sum of 40 billion dollars. This acquisition risks shaking up the semiconductor industry and at the same time, allowing Nvidia to make great strides towards mastering artificial intelligence.

The rumors are true, Nvidia, pioneer of graphics cards and AI has confirmed the purchase of the English chip manufacturer ARM for the record sum of 40 billion dollars. This sum will be partly paid back in shares and 12 billion in “cash”. This buyout will be finalized in the next 18 months and the signing of the contract will result in a first payment of $2 billion.

For information purposes, the company ARM was owned by Japanese giant SoftBank Group Corp., who himself bought it in 2016 for the sum of $31.5 billion. This repurchase also resulted in a transfer of around 8% of Nvidia’s shares to Softbank’s Vision Fund. ARM employees will receive the equivalent of $1.5 billion in shares from Nvidia and in the event that the company does not meet the financial targets set by this agreement, SoftBank will be able to claim 5 billion dollars in additional cash or shares.

Nvidia’s acquisition of ARM is one of the largest transfers in the entire semiconductor industry worldwide. This is likely to change a lot of things on the market because it is important to remember that ARM is the designer of many processors, notably smartphones, tablets and laptops.

Professionals in the sector are unanimous, the acquisition of ARM by Nvidia can help the firm and accelerate the development of its artificial intelligence platform and make it accessible to numerous consumer devices and thus, at the same time, multiply the uses of AI in the general public domain.

Nvidia and ARM to create the first supercomputer dedicated to AI

NVIDIA[/isgg] NVIDIAAI Computing will then be accessible to everyone around the world.

According to the CEO of the American firm, this acquisition will at the same time be a boon for ARM which will boost its Research and development capabilities but which will also extend its access to Nvidia technologies in terms of AI and GPUs.

While ARM’s headquarters remained based in Cambridge, England, a new research & development center will open its doors and whose role will be to improve the firm’s knowledge in the field of AI. The ultimate goal of this merger is to successfully develop a supercomputer dedicated to learning and artificial intelligence using the new generation of ARM processors to come.

Acquisition of ARM by Nvidia: China blames the blow

Before being formalized, this acquisition will need to obtain approval from the United Kingdom, the European Union, the United States and also China. The problem is that the current tensions between China and the United States are likely to pose a problem in this decision-making.

Indeed, the purchase of this English firm by Nvidia makes that the latter not only changes ownership, but also nationality. For China this is a real economic problem in the world of semiconductors because until now, it had control of ARM China. Despite this problem, the CEO of Nvidia, Jensen Huang, nevertheless maintains that he remains fully confident and does not envisage any other purpose than those planned to date.

Another risk incurred by this acquisition is thata future change in economic model could pose a problem for its biggest customers, and in particular for Apple which uses its processors in many products. However, ARM affirms that it will not let go of its open-licensing model which has allowed it to acquire the notoriety that we know today.