That $40 billion purchase price also includes $1.5 billion in equity compensation for existing Arm employees, which now number more than 6,000 according to the company. "We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields".
Nvidia is now the worlds leading GPU maker.
Simon Segars, CEO of Arm, agreed that Arm and Nvidia are a good match, sharing a vision for energy efficient computing to address a host of pressing issues, with strong commitment to long term R&D to reach their goals. According to a Reuters report, SoftBank's investment arm Vision Fund will acquire a stake of between 6.7 percent and 8.1 percent in Nvidia. NVIDIA intends to retain the name and strong brand identity of Arm and expand its base in Cambridge. The companies said sign-offs are needed from China, U.K., European Union and USA authorities and may take as long as 18 months. The acquisition will not include Arm's IoT Services Group, which the chip designer had previously planned to spin out into new independent entities owned by SoftBank. The remaining funds will be split up between a $2 billion initial signing payment, an additional $5 billion if Arm performs to a set level, and another $1.5 billion to Arm employees, made up of NVIDIA stock. Nvidia will add its technology to the offerings licensed by Arm, the Santa Clara, Calif., company said. From there, it will receive another $10 billion in cash and $21.5 billion of stock in Nvidia at closing. "We'd like the ecosystem to be as rich as possible". The heavy Nvidia stock component of the deal will see SoftBank returning as a major investor in the company.
SoftBank acquired Arm for $32 billion in 2016, its largest-ever buy, partly to develop into the web. The company's chip power mobile device processors for companies including Apple, Samsung, and Qualcomm. When the deal closes, Nvidia will own a minority.
Under Huang, Nvidia has risen rapidly up the ranks of technology companies in market value and influence. Huang said a priority will be investing in Arm's efforts to design chips for data center computing.
"The government monitors acquisitions and mergers closely and when a takeover may have a significant impact on the United Kingdom we will not hesitate to investigate further and take appropriate action", said Prime Minister Boris Johnson's spokesman, James Slack.
The British firm doesn't make chips.
"We love Arm's business model".
Nvidia recently overtook Intel in becoming the world's most valuable chipmaker.