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TOKYO / PALO ALTO, USA – On the day he won the deal to acquire British chip designer Arm four years ago, SoftBank Group director Masayoshi Son said it was “the happiest day of my life. business “.
He had been keeping an eye on Arm ever since his friend Steve Jobs had been enthusiastic about it, referring to the new iPhone that Apple was creating. So when the $ 31 billion deal was agreed in July 2016, the largest corporate acquisition in Japanese history, Son was elated.
In his hands was a crystal ball that would show him the future.
Arm has a share of approximately 90% of the chip designs used in mobile phones. Through its customer relationships, Arm is in a unique position to observe and listen to the latest developments in the world of technology.
For Son, such a view, which would allow the Japanese group to predict and prepare for the data-driven future, was worth the high price. The world of technology has gone from the mobile and Internet universe that Jobs defended to one more based on big data. Now was Arm’s time.
But in just four years, Son has made the decision to hand over the reins to another tech gamer: Nvidia CEO and co-founder, in a leather jacket, Jensen Huang.
As it happens, a month after Son’s acquisition of Arm, he and Huang met in a suite room at the Tokyo Conrad Hotel, located on the upper floors of the building that housed SoftBank’s headquarters.
The stated purpose of the meeting was to sign an agreement to work together on autonomous vehicle technology. But, as Son saw it, limiting this opportunity to partner with a semiconductor industry luminaire to just one field would be thinking too small.
“Autonomous driving is great, but I want to talk about something bigger,” Son said after a presentation on the subject.
He asked Huang a question: “The whole world will eventually become a single computer. What can you do then?”
Nvidia is a major producer of graphics processing units, which, for example, render images in video games without problems. This technology can be used in other complex tasks such as speech recognition and as such is in high demand. GPUs can speed up the processing of simpler calculations, making them valuable for deep learning and artificial intelligence.
In other words, Son was asking what Nvidia’s GPU technology could offer when the world connects through the Internet of Things.
Huang realized Son’s intention.
“Autonomous driving is important, but it’s only one area,” he replied, before moving on to discuss Nvidia’s broader ambitions.
At that moment, the couple of charismatic leaders found themselves on the same wavelength.
Nvidia said Sunday that it will buy Arm from SoftBank in a deal worth up to $ 40 billion, of which $ 21.5 billion will be in stock, giving SoftBank a 6.7% to 8% stake, 1% at the GPU manufacturer.
The deal will bring SoftBank up to $ 9 billion on the $ 31 billion it paid for Arm in 2016.
The Nvidia GPU alone cannot serve as the brain of a system. For that, the company turned its attention to Arm and its expertise in designing central processing units, which are capable of handling more complicated calculations.
Energy efficiency is one of the main characteristics of Arm designs. Nvidia is looking to combine CPU Arm designs with its own GPUs to create AI chips that can rapidly process large amounts of data with minimal power consumption.
The American company sees opportunities in areas such as data centers, where artificial intelligence chips are often incorporated into servers and power needs have steadily increased as more data is processed.
This is consistent with the answer Huang gave Son four years ago.
What’s next for Son?
The Japanese billionaire has long followed what he calls a “cluster” strategy: using the investment to build a group of technology companies in a wide range of fields. By having Nvidia under its umbrella, SoftBank may add a stronger chip company to the cluster, it is thought.
But while SoftBank will be a major shareholder in Nvidia, the equity ratio will be relatively weak compared to other companies in the cluster, in which the Japanese conglomerate has stakes of 20% to 40%.
It remains to be seen to what extent SoftBank will be able to maintain its new connection with Nvidia.
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