"Arm and NVIDIA share a vision and passion that ubiquitous, energy-efficient computing will help address the world's most pressing issues from climate change to healthcare, from agriculture to education", said Simon Segars, CEO of Arm.
ARM licenses its technology to many well-known semiconductor, software and OEM manufacturers in the world.
Nvidia Corp's $40bn acquisition of chip designer Arm is set to catapult it into the fray of geopolitical tensions between Beijing and Washington, analysts and lawyers said.
Tudor Brown, Arm's former chief executive, said the deal "just doesn't work" if Arm was "owned by one of these heavyweights".
After months of rumors and speculations, the Nvidia-Arm acquisition deal has become a reality.
Meanwhile, Arm's ownership by an American company also raises the possibility that Washington could place restrictions on its business in China, industry experts said. It will be curious to see if this deal with NVIDIA affects the long-term market for the various companies, but the whole point of Arm Holdings is licensing of the IP as the business model.
Struck overnight, the sale to the United States company just four years after SoftBank bought Arm will put vital supplies to Apple and others under the control of a single player, sparking potential pushback from regulators and Nvidia's rivals.
ARM's tech is at the heart of most smartphones, among many other devices. Nvidia will spend $21.5 billion on stock purchases, and ARM employees will receive Nvidia shares worth $1.5 billion.
In an interview with Reuters on Monday morning, Hauser said the deal would lessen competition in the industry, undermine ARM's neutrality, and risk operations being moved overseas.
Arm will be a division under Nvidia, with its headquarters remaining in Cambridge.
Although NVIDIA's dominance is primarily centered around its GPUs, the company has been toying with hardware production that targets AI applications (much like other big chipmakers have) such as its Jetson boards for "next-generation autonomous machines", which feature an Arm architecture. "In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today's internet-of-people".
The cash pile is a significant achievement for SoftBank, which half a year ago was struggling with a stock price in free fall and billions of dollars in write-downs on investments that turned sour, such as in US office-share company WeWork.
Nvidia CEO Jensen Huang said the US company still plans to keep Arm based at its headquarters in Cambridge, England, where it will also build an artificial intelligence research center. The transaction does not include Arm's IoT Services Group.
We expect Nvidia to unveil plans for how it will deal with regulatory concerns and make certain ARM's existing customers retain uninterrupted access to IP and do not fear being blocked out of future access to processor designs. This is something that rival tech companies may be concerned about, as Nvidia is already a dominant force in the GPU landscape.