Nvidia Likely Pulling Out of Arm Acquisition After Failing to Win Regulatory Approval

[MacRumors]

Nvidia is no longer planning to acquire chip maker Arm after failing to win approval for the venture, reports Bloomberg. Nvidia will "quietly" abandon the purchase because it has made no progress in gaining support from regulators and is facing an FTC lawsuit blocking the deal.

Nvidia in September 2020 announced plans to purchase Arm from SoftBank for $40 billion, but it was clear from the beginning that the purchase would be subject to regulatory scrutiny as Nvidia is a customer of Arm and Arm has many licensing deals with Nvidia competitors.

In December 2021, the United States Federal Trade Commission filed a lawsuit to prevent Nvidia from acquiring Arm as the purchase would give Nvidia control over computing technology and designs that rival firms rely on to develop competing chips. The FTC said that allowing the acquisition to move forward would stifle "innovative next-generation technologies" and would "unfairly undermine" Nvidia's competitors.

Chipmaker Qualcomm was one of the Nvidia competitors that objected to the purchase, and in February 2021, the San Diego-based company told the FTC, the European Commission, the UK Competition and Markets Authority, and China's State Administration for Market Regulation that the acquisition would allow Nvidia to become the gatekeeper for Arm's technology, preventing other chipmakers from using it.

With the deal looking unlikely to be approved, Nvidia is now telling partners that it does not expect the transaction to close. SoftBank is preparing for an initial public offering in case the Nvidia takeover does not happen, but Bloomberg says that both companies are continuing to speak with regulators at this time in the hopes that something might change.

Article Link: Nvidia Likely Pulling Out of Arm Acquisition After Failing to Win Regulatory Approval

 

[KPOM]

Not surprising. Too many regulators had anti-trust concerns. To even think of getting approval they would have had to make so many concessions I doubt the numbers would have made sense.

 

[jz0309]

No surprise… they will not get regulatory approval at these times

 

[thedocbwarren]

This is a good move honestly. End of the day ARM will be used widely and will continue to sustain independently.

 

[blazerunner]

Queue homers saying Apple should buy them.

Because you know, Apple is entitled to everything.

 

[applicious84]

Not totally related, but why is Nvidia so much bigger than AMD and Intel?

 

[KaliYoni]

Given Softbank's history of sudden and often inexplicable moves, maybe we're about to find out about a new company: WEnvidiaWORK.slack . Talk about leveraging the synergies between RISC technology, enterprise messaging, and kombucha-avocado toast smoothies on tap! I'm calling my broker now.

 

[turbineseaplane]

Good.
We need a lot less consolidation, not more

 

[Seoras]

We should have a poll to see who the MR regulars think will be next to attempt to purchase ARM.
Intel? ?

 

[Your Royal Highness]

The arm architecture is a commodity. No licensee should own the entire widget to the detriment of entire industry.

 

[TheYayAreaLiving 🎗️]

We should have a poll to see who the MR regulars think will be next to attempt to purchase ARM.
Intel? 🤣

It could be Apple too. Intel is too broke lol

 

[asdfjkl;]

In my opinion, an all too rare instance of regulators doing the right thing. I don't see how consolidation among chip makers would help consumers / the market in any way. This proposed merger has conflict of interest written all over it. We, the consumers, would ultimately end up paying more for less if this went through.

 

[erikkfi]

Why should Apple buy ARM when they can buy failing home exercise equipment maker Peloton instead? Remember that story from last week?

It’s a story when Wall Street “analysts” say something, right?

 

[Zdigital2015]

Queue homers saying Apple should buy them.

Because you know, Apple is entitled to everything.

Apple would likely face the exact same type of regulatory scrutiny that NVIDIA is facing, which makes this a non-starter for them. It’s in everyone’s best interest that Arm stay independent of any chipmakers or very large tech companies (Google, Facebook, Apple, Amazon), but I wonder if they have the business acumen to keep their model sustainable in the current environment. What might be viable, although a political nightmare, would be for the parties most interested in Arm’s success forming a consortium that then in turn purchases Arm. This could work.

 

[DaRev]

Queue homers saying Apple should buy them.

Because you know, Apple is entitled to everything.

Why would Apple need to buy them, they already bought an Architecture License allowing them access to all future upgrades.

 

[turbineseaplane]

Why would Apple need to buy them, they already bought an Architecture License allowing them access to all future upgrades.

You’re applying logical thinking..

The implication here is that the Apple homers often do not

 

[elvisimprsntr]

We should have a poll to see who the MR regulars think will be next to attempt to purchase ARM.
Intel?

If Intel, it will be to scuttle ARM

 

[JPack]

This deal was dead from the start due to obvious roadblocks.

U.K. was never going to give up Arm. And Arm China would never give up its licenses which includes ARMv9.

Even if Nvidia managed to buy Arm, there would be two companies in the world able to grant Arm licenses. One in U.S. and one in China. That would completely devalue the purpose of buying Arm in the first place.

 

[Spock]

I am not sure why its in my head, maybe its my PowerPC days but I think IBM would be a good buyer for ARM. It could add to the work they do with the power architecture.

 

[Zdigital2015]

Why should Apple buy ARM when they can buy failing home exercise equipment maker Peloton instead? Remember that story from last week?

It’s a story when Wall Street “analysts” say something, right?

I doubt Apple has any interest in Peloton. Which is a good thing, actually. I just don’t see any synergy there unless it’s gaining more subscriber’s to Fitness+.

 

[Cosmosent]

I am not sure why its in my head, maybe its my PowerPC days but I think IBM would be a good buyer for ARM. It could add to the work they do with the power architecture.

NOT many know this, but back in the early-mid 1990s, Intel's i960 family & AMD's 29K family were the Top Embedded Processors !

Both fell by the wayside ... could be time for a new entrant, like IBM.

 

[Realityck]

Tech giants lined up against the takeover. A group that includes Qualcomm, Microsoft Corp., Intel Corp. and Amazon.com Inc. have provided regulators around the world with what they believe is enough ammunition to kill the deal, according to people familiar with the process. In addition to needing approval in the U.S. and China, the Arm purchase needs clearance from the European Union and the U.K., both of which are studying the deal closely.

The sale of Arm is under heavy scrutiny because its chip designs are used in everything from phones to cars to factory equipment, making neutrality the foundation of its business model. The world’s biggest tech companies rely on Arm technology, and they fear they could lose unfettered access under Nvidia.

It was just too a big a deal to trust one company with it seems.

 

[Rigby]

Not totally related, but why is Nvidia so much bigger than AMD and Intel?

By what metric? When it comes to revenue and profit, they are quite a bit smaller than Intel (2021 annual revenue about $17 billion versus Intel's $78 billion, profit about $10 billion versus Intel's $44 billion). AMD is smaller though (revenue about $10 billion).

Nvidia has a higher market capitalization than Intel though, which reflects growth expectations for the future that may or may not be accurate.

 

[0924487]

I am not sure why its in my head, maybe its my PowerPC days but I think IBM would be a good buyer for ARM. It could add to the work they do with the power architecture.

No, that will give the US government control over ARM licensing, and they will use it to blackmail and sanction others.

 

[CarlJ]

Why would Apple need to buy them, they already bought an Architecture License allowing them access to all future upgrades.

Also, buying ARM would present them with a bunch of problems - they'd still have to license the existing/future ARM line to everyone else, but they've got their own highly specialized ARM line - Apple Silicon - and they'd have to keep the two separate. How do you make continual expected advances on the "public" ARM branch, while keeping your own AS line separate and significantly better? They'd get a lot of complaints that they were holding back progress on the ARM line to save those improvements for their AS processors. Lots of existing ARM users would probably cry foul, to regulators who are taking an increasing interest in Apple. Not a headache they'd likely want to take on.

The only "Apple should buy Big Company X" that ever made at least a little sense to me has been, "Apple should buy Sonos" - they both go for the premium "it Just Works" market, and Sonos has a bunch of whole-home and home-theater stuff that Apple could use immediately (and improve upon), and would feel right at home in Apple Stores (they'd have to keep Sonos separate enough that it could keep up full support for the other platforms, and all the other streaming services, or they could run into trouble).

(Vaguely related, there has been talk of TV+ getting broadcast rights for NFL games - one of the most humorous suggestions I recall, long ago, when discussing buyouts, was that Apple had the money to literally buy every NFL team - own not just the broadcasts, but the entire league - boy would that get some people bent out of shape.)