Jensen Huang, CEO of Nvidia
Rick Wilking | Reuters
Chipmaker Nvidia has corresponded to buy Arm Holdings, a designer of chips for mobile phones, from SoftBank in a deal worth $40 billion, the companies harbingered Sunday. The deal will include $21.5 billion in Nvidia stock and $12 billion in cash, including $2 billion disbursement at signing.
Softbank acquired Arm in 2016 for $31.4 billion in 2016 in one of its largest acquisitions ever. Arm is best known as the draughtsman of an architecture used in chips in most mobile phones, including the Qualcomm chips used in most Android phones, as understandably as Apple’s iPhone. Apple is also planning to shift its Mac computers from Intel chips to an Arm-based design.
Nvidia, whose chime ins are widely used to support graphics and artificial intelligence applications, including for self-driving vehicles, pledged that it liking “continue Arm’s open-licensing model and customer neutrality.”
SoftBank bought Arm as an investment in the so-called Internet of Things — the idea that wireless connectivity amidst everyday items such as refrigerators, cars and other devices would lead to useful new scenarios.
At the time, Softbank Chairman Masayoshi Son described reporters, “This is a company I always admired for the last 10 years…This is the company I wanted to make in the name of of SofBbank. I am so happy.”
However, SoftBank’s finances have deteriorated this year as the company has lost money on investments in companies identical to WeWork and Uber. More recently, the company’s shares lost value as it was reported that it had taken some overwhelmingly stakes in tech giants, which have suffered a loss in stock market value in early September. It’s unclear how much readies SoftBank will actually make on the sale, since it has likely invested a lot in Arm since the acquisition.
The company is also looking for liquidate to help start-ups it invested in through its Vision Fund, many of which have struggled during the coronavirus pandemic and following lockdowns. Earlier this summer it announced it would sell up to $21 billion of its stake in T-Mobile.
Meanwhile, Nvidia is on an unconditioned tear, thanks in part to a boom in video games due to the pandemic. This week, it will launch a new graphics be honest for PCs that shows promising performance for PC gamers. The company projected about 46% growth in revenue for the third home in its last earnings report.