"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. "For Arm's ecosystem, the combination will turbocharge Arm's R&D capacity and expand its IP portfolio with NVIDIA's world-leading GPU and AI technology".
The deal would also destroy Arm's "neutral" business model, which has made it the "Switzerland of the semiconductor industry", Hauser said.
Nvidia recently surpassed Intel to become the most valuable US chip company by market capitalization.
Basically, Arms develops some similar tech to NVIDIA, but mostly deals in areas where the previously GPU focused designer doesn't normally work with on a frequent basis. Technically Arm and NVIDIA are not direct competitors, since Arm licenses chip designs, but does not make its own processors, while NVIDIA designs and produces its own chips. SoftBank initially acquired Arm for $32 billion four years ago.
Nvidia will pay twelve billion USA dollars in cash, with two billion U.S. dollars already due as soon as the contract is signed.
Regulators in the U.S., U.K., China, the European Union will need to approve the deal, which will need about 18 months to complete.
The head of Arm, Simon Segar, said a purchase by a USA company would not affect which countries it sold to.
Nvidia founder and chief executive Jensen Huang said the takeover would "create a company fabulously positioned for the age of AI" and have "tremendous benefits for both companies, our customers, and the industry". As for concerns the deal will upset Arm's relationships with customers including Apple Inc., Huang said Nvidia is spending a lot of money for the acquisition and has no incentive to do anything that would cause clients to walk away.
KitGuru Says: NVIDIA's acquisition of ARM is expected to complete within the next 18 months, so there is still a long road ahead before the two companies fully merge. He drove its expansion into new segments like the "Internet of Things" - connecting up machines and appliances - as well as a software business based on data collected from Arm-embedded devices.
ARM specialises in the CPUs we often see in smartphones and other devices.
In recent days leading figures in the Cambridge technology sector have lobbied Downing Street, calling for ministers to intervene to bring ARM back under United Kingdom ownership.
Arm is the most important technology company in Britain, and one of a handful of European tech groups that operate on a global scale.
Cambridge's Labour MP, Daniel Zeichner, has also repeatedly called for the government to intervene in the sale of the company which has designed nearly the entire suite of chips which control smartphones.