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Nvidia confirmed that it was purchasing chip design maker Arm Holdings for $40 billion from SoftBank.

Nvidia confirmed that it was purchasing chip design maker Arm Holdings for $40 billion from SoftBank, according to TechCrunch.

SoftBank purchased Arm Holdings for $32 billion in 2016. The boards of all three parties approved the deal.

The deal is complex.

  • SoftBank is receiving $2 billion in cash upfront from the signing.
  • SoftBank will then receive another $10 billion in cash and $21.5 billion of Nvidia stock.
  • SoftBank could also earn an additional $5 billion with a mix of cash and stock based on performance.

Nvidia is purchasing all of Arm's product groups except for its Internet of Things division. The closing is expected to take one and a half years and has yet to receive regulatory and antitrust approval from the US, UK, China, and the EU.

This deal helps SoftBank regain its footing with some immediate cash. The firm has been actively trying to recover after massive losses recently. The Nvidia stock SoftBank is receiving makes it a majority investor in the firm.

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