Why NVIDIA buys ARM for $ 40 billion


Nvidia, the graphics card and chip giant that has been driving advances in artificial intelligence for about ten years now, has just made official the buyout for around $ 40 billion (including $ 21.5 billion in shares) of ARM, from SoftBank.

During a conference call Jensen Huang, founder and boss of Nvidia, and Simon Segars, ARM, explained the main thrusts behind the merger. With his usual sense of humor, Jensen Huang immediately assured that this takeover is part of a long-term race for which his company is thinking big: “We are the ones who bet the highest, because we are the most motivated”, did he declare. Why ?

Strengthen its ubiquitous strategy

Because with more than 130 billion ARM processors produced until 2019, the British company is omnipresent. Its chips can be found in the world of the Internet of Things (IoT) as well as in supercomputers. Nvidia itself produces ARM chips for its own products or for Nintendo’s Switch.

This omnipresence corresponds perfectly to that which Nvidia, which for several years intends to be present with its chips from the cloud to edge computing (when the computing power is deported directly into the connected devices, whether it is a surveillance camera or a small robot).

The acquisition of ARM is also an opportunity for Nvidia to significantly boost its ecosystem.

A fusion of know-how

To listen to Jensen Huang, this takeover is also an opportunity to merge two technological sums, two sets of essential intellectual properties. ARM’s know-how in scalability, for example, that of Nvidia in high-performance chips for parallel computing, too. The two players share the same quest for energy saving.

The boss of Nvidia lets imagine a world where the graphic know-how of his company could exist in the SoC ARM, for example. But beyond this obvious rapprochement, another issue motivates this takeover: artificial intelligence. Area in which Nvidia has learned to weigh in recent years.

Jensen Huang said the new structure will mean heavy investment in R&D in the field of artificial intelligence. One of the manifestations of this effort will be the creation of a “World-class research center”, associated with the construction of an ARM / Nvidia supercomputer, in Cambridge, where ARM is currently located. This is another issue that Nvidia must face, reassuring the British authorities that the technological and economic gem that is ARM is not being stolen from it.

Obviously, Nvidia has every interest in having the regulators on its side, as this takeover will have to be approved in a process that is expected to take at least a year. But on paper the promise is beautiful. ” This buyout is not a consolidation “, According to Jensen Huang, because” there is little overlap between the activities of the two companies “. There would therefore be no risk of ending up in a monopoly situation. ” This acquisition is synonymous with growth, cooperation, bringing together different skills and know-how. “, he added. ” Our goal is to create something unique “.

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