Nvidia bought arm holdings from SoftBank for $ 40 billion

Jenson Huang, CEO of Nvidia

Rick Wilking | Reuters

Chipmaker Nvidia has agreed to buy designer Arm Holdings, which makes chips for mobile phones, from Softbank in a $ 40 billion deal. The deal would include $ 21.5 billion in Nvidia stock and $ 12 billion in cash, including $ 2 billion payable in signature.

In 2016 SoftBank acquired Arm in one of its largest acquisitions in 2016 for $ 31.4 billion. Arm is known as the designer of an architecture used in chips in many mobile phones, including Qualcomm’s chips used in many Android phones, as well as Apple’s iPhone. Apple is also planning to move its Mac computers from Intel chips to arm-based design.

Nvidia, whose chips are widely used to support graphics and artificial intelligence applications, including self-driving vehicles, pledged that it would “continue the arm’s open-licensing model and customer neutrality.” ”

SoftBank bought the arm as an investment in the so-called Internet of Things – the idea that wireless connectivity between everyday objects such as refrigerators, cars, and other devices would give rise to useful new scenarios.

At the time, SoftBank President Masayoshi Son told reporters, “This is a company that I have always admired for the last 10 years … This is the company I wanted to be a part of SoftBank. I am very happy. ”

However, SoftBank’s finances deteriorated this year as the company lost money on investments in companies such as WeWork and Uber. Recently, the company’s shares lost value as it was reported that it had made some big bets in tech giants, which suffered a loss in the stock market value in early September.

The company is also looking for cash to help invested start-ups through its Vision Fund, many of which struggle during the coronovirus epidemic and its subsequent lockdown. Earlier this year it announced that it would sell its $ 21 billion stake in T-Mobile.