GPU giant Nvidia has agreed to acquire British chip designer Arm from SoftBank for $40 billion.
Unlike Nvidia, which designs and sells its chips, Arm licenses out its designs to other chip companies, including Apple, Qualcomm, and Amazon. This approach means Arm earns significantly less per chip sold, but equally means it ends up in a lot more products.
More than 180 billion Arm-designed chips have been shipped since the company was founded nearly 30 years ago, making it the world’s most popular instruction set architecture.
The transaction is expected to close in 18 months, subject to what could be significant regulatory hurdles. Nvidia will pay SoftBank a total of $21.5 billion in common stock and $12 billion in cash, as well as issue $1.5 billion in equity to Arm employees. The remaining $5 billion in cash or common stock is subject to meeting undisclosed financial performance targets by Arm.