Nvidia secures its spot in the AI sector
After the long-awaited outcome for the agreement between TikTok and the Oracle, the new week brought into attention another deal.
One of the world's largest chip manufacturers, Nvidia, closed a deal with the Japanese SoftBank. The former bought from the latter a UK-based company specialized in chip manufacturing – Arm Holdings.
Arm Holdings will be sold for a mix of cash and stocks: Nvidia will pay $21.5 billion in stocks and $12 billion in cash. Under the deal, SoftBank could receive roughly $5 billion in cash or stock, if Arm is reaching its financial targets. Moreover, Arm’s employees are to receive $1.5 billion worth of Nvidia stocks.
Until now, this deal is the largest takeover in this industry. It is not only a gain for Nvidia, as it can expand its business in the microprocessors sector but also for SoftBank from a financial point of view – as the overall money that it will receive from Nvidia will top $40 billion, more than what it paid in 2016 when it bought the company.
Nvidia plans to leave Arm headquarters in Cambridge, UK, but is looking to expand the AI research facility, focusing on developments in healthcare, life sciences, self-driving cars, robotics, and so on.
The deal is now undergoing regulatory processes, and it is expected to close in the next 18 months.
Following the news, during the American trading session Nvidia is trading 7.50% higher, while SoftBank is getting closer to 10%.
Read all about the deal between TikTok and Oracle on CAPEX.com!
Sources: marketwatch.com, bbc.com, finance.yahoo.com
This information is prepared for general circulation. It does not have regard to the specific investment objectives, financial situation or the particular needs of any recipient.
You should independently evaluate each financial product and consider the suitability of such a financial product, by taking into account your specific investment objectives, financial situation or particular needs, and by consulting an independent financial adviser as needed, before dealing in any financial products mentioned in this document.
This information may not be published, circulated, reproduced or distributed in whole or in part to any other person without the Company’s prior written consent.
Past performance is not always indicative of likely or future performance. Any views or opinions presented are solely those of the author and do not necessarily represent those of sc.capex.com