The rumors were true: Nvidia has announced that it will acquire British chip design company ARM Limited for $40 billion. The deal is still awaiting regulatory approval, but the Cambridge-based business will be transferred to Nvidia from Softbank Group, which acquired ARM in 2016 for $32 billion.

ARM specializes in chips for smartphones, tablets, and portable gaming devices. Its processors power everything from Apple's phones to the Nintendo DS, and as Paul wrote in July, the acquisition would suddenly strengthen Nvidia's share price dominance over Intel. The acquisition may be a dramatic expansion for Nvidia, which is known for developing high-end (more niche) chips.

According to Nvidia's announcement, ARM's Cambridge headquarters will expand with a new AI-focused R&D center. Indeed, AI development appears to be a strong motivation for this acquisition. In a prepared statement, Jensen Huang, CEO of Envidia, said, "In the next few years, trillions of computers running AI will create a new Internet of Things that will be thousands of times larger than today's Internet of People. Our combination will create companies that are wonderfully positioned for the AI era." [The proposed AI research facility appears to support "development in healthcare, life sciences, robotics, self-driving cars, and other areas."

The deal will be completed in "approximately 18 months," according to Nvidia.