Do you remember when NVIDIA tried to compete in the market for mobile chips? It was interesting and exciting and it erupted quite quickly – now you only see Tegra in SHIELD and Switch. But NVIDIA is back on the market in a big way: by acquiring Arm Limited, which licenses the design for most of the world̵7;s smartphone chips.
NVIDIA announced on Sunday that it intends to acquire Arm Limited and buy it from its current parent company SoftBank for USD 40 billion in cash and shares. As the world’s leading manufacturer of graphics processing units, NVIDIA is no stranger to the chip design process or even to Arm’s business model for designer licenses. The deal would make NVIDIA a key player in the mobile market and beyond virtually overnight.
A little background: Arm Limited (also known as Arm Holdings or simply “ARM”) designs chip architecture and then licenses designs to manufacturers who actually build the chips in their own factories. So Arm designs a new generation of chip foundations, then companies like Qualcomm, Apple, Samsung and MediaTek pay for these designs, customize them to suit their needs and then manufacture the chips to go into your phone, tablet, low-powered computer, and so on. NVIDIA does not buy the companies that actually make Snapdragon, Apple silicon, Exynos, yadda yadda chips, but they do buy the technology they are all based on.
NVIDIA says it plans to keep Arm at its current headquarters in Cambridge, England, and complement it with a new AI research facility and a new supercomputer center. As part of the acquisition, NVIDIA says it will distribute $ 1.5 billion to current Arm employees in the form of equity.
But the deal is far from over. NVIDIA’s press release says that the company hopes to undergo the regulatory process in 18 months, which seems optimistic. PR also says that they need approval from relevant government boards in the US, UK, European Union and China. The EU has been antagonistic to US technological acquisitions for decades, and the US government’s highly public struggle over TiqTok is unlikely to speed up the regulatory process in China.