Chip company Arm has been sold to graphics and hardware giant Nvidia.

The firm was sold by Japanese bank Softbank in a deal that valued Arm at $40bn. Nvidia has said that Arm will remain in its native Cambridge, likely to quell fears that the GPU specialist would relocate those jobs overseas. The graphics company has also said that it will be expanding Arm's presence at its current headquarters.

Softbank bought Arm back in 2016 for $32bn. The deal occurred after the EU Referendum, which saw the UK vote to leave the European Union, with the pound fall sharply in value. As a result, the purchase was something of a steal for the Japanese bank.

Arm is the market leader for processors in mobile phones and tablet computers, while Nvidia leads the graphics processor sector. This is a seismic purchase that definitely gives the firm an edge overall.

“AI is the most powerful technology force of our time and has launched a new wave of computing," Nvidia boss Jensen Huang (pictured) said.

"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. Our combination will create a company fabulously positioned for the age of AI.

“Simon Segars and his team at Arm have built an extraordinary company that is contributing to nearly every technology market in the world. Uniting Nvidia's AI computing capabilities with the vast ecosystem of Arm’s CPU, we can advance computing from the cloud, smartphones, PCs, self-driving cars and robotics, to edge IoT, and expand AI computing to every corner of the globe.

“This combination has tremendous benefits for both companies, our customers, and the industry. 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.

“Arm will remain headquartered in Cambridge. We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields. And, to attract researchers and scientists from the U.K. and around the world to conduct groundbreaking work, NVIDIA will build a state-of-the-art AI supercomputer, powered by Arm CPUs. Arm Cambridge will be a world-class technology center.”

Softbank's chair and CEO Masayoshi Son added: “Nvidia is the perfect partner for Arm. Since acquiring Arm, we have honoured our commitments and invested heavily in people, technology and R&D, thereby expanding the business into new areas with high growth potential. Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm. This is a compelling combination that projects Arm, Cambridge and the U.K. to the forefront of some of the most exciting technological innovations of our time and is why SoftBank is excited to invest in Arm’s long-term success as a major shareholder in Nvidia. We look forward to supporting the continued success of the combined business.”

Meanwhile, Arm boss Simon Segars added: “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. Delivering on this vision requires new approaches to hardware and software and a long-term commitment to research and development. By bringing together the technical strengths of our two companies we can accelerate our progress and create new solutions that will enable a global ecosystem of innovators. My management team and I are excited to be joining Nvidia so we can write this next chapter together.”