Analysts at Japanese financial services company Osaka Matsui Management have said that Graphics giant NVIDIA has announced its $40 billion purchase of SoftBank-owned UK chipmaker Arm with the goal to build a market-leading artificial intelligence (AI) computer company.
The acquisition will consolidate NVIDIA's central role within the semiconductor industry. While it is the pioneer for GPUs, it has little to do with CPU design or mobile hardware where Arm is one of the markets pioneering companies.
"In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today's internet-of-people. Our combination will create a company fabulously positioned for the age of AI," said NVIDIA founder and CEO, Jensen Huang.
According to data collected by Osaka Matsui Management, SoftBank will continue its commitment to the long-term success of Arm through its ownership stake in NVIDIA, estimated to be less than 10 per cent.
"Under the terms of the deal, NVIDIA will pay SoftBank $21.5 billion in common stock and $12 billion in cash, this includes $2 billion payable at the time of signing," said Michael Carter, Head of Global Equities at Osaka Matsui Management.
"SoftBank will collect around $5 billion in cash or common stock under an earnout arrangement. NVIDIA will also issue $1.5 billion in equity to Arm workers," added Michael.
Arm's headquarters will remain in Cambridge, England. Powered by Arm CPUs, NVIDIA will develop a state-of-the-art AI supercomputer.
"Uniting NVIDIA's AI computing capabilities with the vast ecosystem of Arm's CPU, we can advance computing from the cloud, smartphones, PCs, self-driving cars and robotics, to edge IoT, and expand AI computing to every corner of the globe," Huang said.
For Arm's ecosystem, the collaboration will supercharge Arm's R&D capability and broaden its IP portfolio with the world-leading GPU and AI technology of NVIDIA.
"Arm was acquired by Japanese technology conglomerate SoftBank for $31 billion back in 2016. The company is responsible for powering major mobile processors for renowned global tech companies like Qualcomm, Apple, Samsung and Huawei," said Alistair Richmond, Director of Corporate Trading at Osaka Matsui Management.
"Since Softbank acquired Arm, it has invested heavily in its workforce, technology and R&D which has expanded the business into new areas with increased potential for growth," Alistair added.
With 180 billion chips shipped by its licensees to date, Arm will remain operating its open-licensing model as part of NVIDIA whilst continuing to preserve the global customer neutrality that was fundamental to its success.
Osaka Matsui Management is a private wealth management company that prides itself on fulfilling clients' goals with passion and integrity. With over $8.4 billion U.S. Dollars of assets under management, Osaka Matsui Management has been assisting both private and corporate clients since 2006.
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