Nvidia confirmed this week that it will acquire processing architecture giant Arm in a massive $40 billion deal. The graphics and AI chip manufacturer plans to build out its AI and global presence using Arm's giant computing ecosystem.

The acquisition will enable Nvidia to expand Arm's presence in the U.K. with the creation of an AI research and education center. The facility will focus on building an Arm/Nvidia-powered AI supercomputer, to be used for research.

Nvidia plans to continue Arm's open licensing policy. Owned by private equity firm SoftBank, Arm employs more than 6,000 workers, while Nvidia currently has more than 13,000. Arm shipped more than 22 billion chips last year for use in smartphones, tablets and IoT sensors, among other things. Nvidia shipped around 100 million chips.

"Arm’s business model is brilliant," wrote Jensen Huang, CEO of Nvidia, in a letter to employees. "We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand Arm’s IP licensing portfolio with Nvidia’s world-leading GPU and AI technology.”

The acquisition puts Nvidia in an interesting position, as the company has traditionally competed with chipmakers like Intel and AMD. Apple has already announced plans to replace the Intel processors in new models of its computers with Arm-based processors. The buyout would make those rivals Nvidia's customers in an interesting twist.

“The Nvidia-Arm deal is not only the largest semiconductor deal by dollar volume at $40 billion but I believe the one with the most significant impact,” Patrick Moorhead, analyst with Moor Insights & Strategy, told VentureBeat. “The deal fits like a glove, in that Arm plays in areas that Nvidia does not or isn’t that successful, while Nvidia plays in many places Arm doesn’t or isn’t that successful. Nvidia brings incredible capitalization to Arm."

Simon Segars, CEO of Arm, said both companies share a common vision of using energy-efficient computing to address a number of issues, including climate change and healthcare. The acquisition will enable the companies to deliver on this vision using new hardware and software approaches.

Nvidia plans to retain the Arm name and brand identity and the the company will remain in the U.K. as a corporate entity.