NVIDIA’s $40 billion purchase of British chipmaker Arm has been one of the most controversial topics in the tech industry over the last 11-12 months. Jensen and Co. managed to bring Arm’s BoD on board for a whopping $40 billion, making it one of the priciest acquisitions in recent history. Looking at the sheer variety in Arm’s portfolio explains why NVIDIA would want to pinch the SoftBank owned chipmaker.
Arm-based processors are just about everywhere from PCs to smartphones, automobiles, and any device with an embedded microprocessor in it. However, the takeover hasn’t been going all that smoothly. Various regulatory agencies, most notably the ones in Britian, China, and EU have expressed their concern over the sole non-US CPU ISA provider falling under the jurisdiction of the American government.
According to the agreement between NVIDIA and ARM’s parent company SoftBank, the acquisition will be completed within one and a half years, but it can be extended to two years at max. This means that the takeover should ideally be completed by March 2022, and latest by September 2022. If that doesn’t happen, either due to probes by regulatory agencies or some other hurdles, the transaction will be scrapped.
Earlier, NVIDIA seemed quite adamant that the takeover would come to a smooth conclusion (by March 2022). However, recently the chipmaker’s tone has become less confident (that is, it’s considering the alternate scenario as well). CEO Jensen Huang has stated that NVIDIA can prosper as a company in the gaming, HPC, data center, and automobile segments even without Arm. At the same time, he has issued a warning to investors, saying that if the various regulators don’t approve the takeover within the deadline, NVIDIA would lose US$1.25 billion in advance payments.
Normally, a company wouldn’t be concerned over this as there are still roughly ten months left till the deadline. However, cos of the high-profile nature of the takeover (and the shared government interests), we’re seeing a new regulator blocking the transaction every month. The British antitrust agency’s attitude towards the acquisition has been the most worrisome for NVIDIA, with repeated calls of an IPO listing.
Then there’s the EU’s antitrust investigation. While not as scrutinizing, it’s still a major hurdle for Team Green. Then there’s the US, and China. A lot of US companies rely on Arm for their processor IP, and with an NVIDIA takeover, competing in the same segments (against NV) will be much more harder. As for China, it’s essentially another part of the trade war puzzle that needs to be stopped from falling into US hands. At the moment, most of the country’s microprocessor startups leverage the Arm ISA in one form or another.