Nvidia To Acquire UK Chip Designer

  • By: Ruchi Gupta
  • Date: July 7, 2022
  • Time to read: 2 min.

Nvidia To Acquire UK Chip Designer Arm Holdings From Softbank For Around $40 Billion

UK based ARM Holdings is being sold to chip-making giant Nvidia Corp (NASDAQ:NVDA) for around $40 billion in a deal that could change the semiconductor sector. The technology of the UK chip designer has increasingly become popular among smartphone manufacturers.

Nvidia looks to form a premier computing company in the era of AI

Japanese conglomerate Softbank bought Arm four years ago in a $32 billion deal, and now they look set to selling the company to Nvidia. Softbank will receive $21.5 billion in shares and $12 billion in cash form the American chipmaker. However, the deal is subject to regulatory approval and could be opposed in the UK by rivals and British legislators wary of foreign takeovers on UK firms.

There is a possibility of Nvidia facing tough opposition on protecting jobs and keeping Cambridge’s headquarters as part of the transaction. Nvidia indicated that it would keep Arm’s headquarters in the UK and recruit more employees and retain the ARM brand. This deal is huge for the semiconductor space, and Nvidia has said that the acquisition will create a leading computing firm in the era of Artificial Intelligence.

Nvidia To Acquire UK Chip Designer

Jensen Huang, the CEO of Nvidia, affirmed that they would keep ARM headquarters in the UK, and they are looking to expand by building a leading AI research facility in Cambridge. The facility will support developments and innovations in robotics, life sciences, healthcare, self-driving cars, and other fields.  According to a senior government official, there won’t be a move to block the sale, but they could impose conditions on the takeover.

ARM headquarter to remain in Cambridge

Softbank has committed to secure jobs and keep the headquarters in the UK until next year. Sonja Laud, Legal & General Investment Management chief investment officer, said that according to Nvidia’s announcement, they would honor the commitment that Software made. However, with expiry approaching and Brexit negotiations, it is yet to be established how the sale develops.

However, ARM co-founder Herman Hauser is skeptical and has described the takeover as a disaster that will destroy the firm’s business model. He equally said that the move could result in job losses at the Cambridge headquarters and across the UK. Hauser described the promises as meaningless because they are not legally binding and likened Kraft’s takeover of Cadbury in 2010.

Image Source: Coolcaesar / CC BY-SA

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