Nvidia plans to acquire semiconductor giant ARM for $40 billion.

On September 13th, Nvidia officially announced that it would spend USD 40 billion to acquire ARM, a British subsidiary of SoftBank.

According to insiders, the deal will be reached in the form of a cash and stock acquisition, and the acquisition price may exceed $40 billion. Nvidia will pay $12 billion in cash and $21.5 billion in Nvidia stock. If ARM achieves the financial goals specified in the contract, SoftBank can also receive $5 billion in cash or stock, and Nvidia will also give ARM employees no less than $1.5 billion in stock compensation.

This transaction is beneficial for both SoftBank and Nvidia. SoftBank Group has achieved the largest annual loss in the history of the group this year and urgently needs funds to remedy it. As a leading enterprise in the semiconductor industry, Nvidia’s acquisition of ARM can not only enhance its own technical strength but also consolidate its dominant position and even change the future industry structure.

However, ARM, as a giant in the chip semiconductor industry, occupies nearly 95% of the global processor architecture licensing market, and the chips of Apple, Qualcomm, and Huawei in the mobile electronics industry are all developed based on ARM architecture. If the transaction is successfully concluded, if the United States uses political means to control ARM, it will be a great hidden danger for competitors, especially for domestic chip companies, which will undoubtedly face severe challenges regarding their survival.

Nvidia CEO Jensen Huang stated that “ARM will continue to operate in an open manner and maintain the neutrality of global customers.” Nvidia officials also stated that ARM’s intellectual property will still be registered in the UK.

Industry insiders point out that Nvidia’s acquisition of ARM will prompt some ARM customers to consider using its architecture as a “last resort.” It is also very likely that the UK will intervene in this acquisition.

Currently, the planned acquisition date is still 18 months away.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.