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With the British company Arm, the specialist in graphics cards Nvidia wants to incorporate a key company for the entire smartphone industry. The previous owner, Japanese tech group Softbank, will part ways with Arm in a deal worth around $ 40 billion, as the company announced Monday night. However, the acquisition still requires approval from competition regulators around the world, and given the importance of the poor, there could be resistance.
Arm is derived from the basic architecture of the processors used in virtually all smartphones and most tablets. Based on the designs of the arms, Apple and Samsung, among others, develop the processors for their smartphones. Chip company Qualcomm, whose processors are found in many Android phones, uses it too. ARM architectures prevailed in smartphones over chip systems from semiconductor giant Intel, among other things because they work significantly more energy-efficient. Now the technology is about to hit the PC market: Apple is converting its Macs to Arm technology, with a first model expected this year.
Over the years, the industry has been able to live well with Arm as a neutral technology provider that has stayed out of conflict between individual industry players. Going forward it could be decisive that Nvidia maintains this neutrality despite its own interests in the chip business. Nvidia boss Jensen Huang assured that Arm’s licensing model would stick. At the same time, Nvidia also wants to offer its graphics technology through the arm platform.
Nvidia also emphasized that Arm’s headquarters should remain in the UK and expand to include research in robotics, autonomous driving and healthcare.
18 months for the approval of the competition authorities
The deal requires the approval of competition enforcement agencies in the United States, the European Union, China and the United Kingdom. Companies allow a period of 18 months for this.
Softbank bought Arm four years ago for about $ 32 billion and took it off the stock market. Now, the Japanese company is getting $ 21.5 billion worth of Nvidia stock and $ 12 billion in cash. Softbank may later raise another $ 5 billion in cash or stock if certain earnings targets are met. Nvidia is also issuing $ 1.5 billion worth of stock to the poor workforce.
Nvidia went big with PC graphics cards; However, a few years ago it turned out that the company’s technology works very well for machine learning. That gave Nvidia’s business a new boost. The company is now also developing computers for driver assistance systems in cars and autonomous driving.
