Remember when NVIDIA was trying to compete in the mobile chip market? It was interesting and exciting, and it fizzled out fairly quickly—now you only see Tegra in the SHIELD and Switch. But NVIDIA is getting back in the market in a big way: by buying Arm Limited, which licenses the design for most of the world’s smartphone chips.
NVIDIA announced on Sunday that it intends to acquire Arm Limited, buying it from its current parent company SoftBank for $40 billion USD in cash and stock. As the world’s leading producer of graphical processing units, NVIDIA’s no stranger to the chip design process, or even to Arm’s designer-licensee business model. The deal would make NVIDIA a central player in the mobile market and beyond practically overnight.
A bit of background: Arm Limited (also known as Arm Holdings or simply “ARM”) designs chip architecture, then licenses that design out 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 those designs, customize them to fit their needs, and then manufacture the chips themselves to go into your phone, tablet, low-powered computer, et cetera. NVIDIA isn’t buying the companies that actually make the Snapdragon, Apple silicon, Exynos, yadda yadda chips, but it’s buying the technology they’re all based on.
NVIDIA says it’s planning on keeping Arm located in its current headquarters in Cambridge, England, supplementing 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 a long way from done. NVIDIA’s press release says that the company hopes to get through the regulatory process in 18 months, which seems optimistic. The PR also says that they’ll need approval from the relevant government boards in the United States, United Kingdom, European Union, and China. The EU has been antagonistic towards US tech acquisitions for decades, and the US administration’s very public battle over TiqTok isn’t likely to make the regulatory process in China any faster.