On Sunday, Nvidia confirmed a deal to buy chipmaker Armfrom SoftBankfor $40 billion.
Arm will operate as a division of Nvidia and remain headquartered in the UK. Itwill also “continue to operate under an open licensing model, maintaining global customer neutrality,” the company said.
SoftBank bought Arm in 2016 for $31 billion, and it helps supply mobile device processors for companies like Apple, Samsung and Qualcomm. Arm has likely only grown in value since the SoftBank acquisition, with Microsoft building a Surface and a version of Windows for Arm, while Apple plans to switch future Macs to Arm-based chips.
Nvidia is the leading GPU manufacturer, but aside from the Tegra of mobile chipsets used in devices like the Nintendo Switch, Nvidia doesn't do much in CPU or hardware .
Speaking to Forbes, Nvidia CEO Jensen Huangsaid his first priority after the acquisition will be to “bring Nvidia technology through Arm’s vast network.” However, that doesn’t necessarily mean Arm will change its current licensing model.
Perhaps to emphasize that it intends to keep Arm a neutral technology provider in the short term, the deal highlights that the chipmaker will continue to be based in Cambridge, UK, and Nvidia says it will invest in building a new AI technology research center.
Both companies see opportunities for development, and AI software that can run on Arm chips, from those tiny in smartphones to those in huge servers.
Nvidia once had big ambitions to make CPUs for phones, but had little success. This acquisition could obviously change that, but it seems like it will focus on data centers at least initially, according to information from The Verge.
"We know for sure that data centers and clouds demand the Arm microprocessor. Energy efficiency translates directly into compute capacity, compute performance, and service cost," Huang said.
The acquisition may face regulatory scrutiny in a less merger-friendly environment than ever before, but the fact that Nvidia and Arm are not direct competitors could help the process along.
