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Nvidia Likely Pulling Out of Arm Acquisition After Failing to Win Regulatory Approval
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HobeSoundDarryl
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Big fat profit from hardware with huge markups... plus ongoing, pretty-much-must-pay-to-use-it, big fat subscription profit from "services"? Yes, I see no fit.
Good. There is no way this should have been approved.
Nvidia has $19.4B to Intel's $34.6B cash-on-hand. Intel has seen more than 80% YOY gains of accessible cash since 2019.
Seems like the easier course for them would be to get the kind of license Apple has. Then they can innovate as best they can and, if they do a good enough job, people will pay them for chips. That avenue hasn't been closed.
There is a lot of overlap in current Apple and Peloton subscribers. Lack of GymKit and overall flaky Apple Watch / fitness tracking support is the primary reason I am not a Peloton customer, but I almost pulled the trigger like many others actually did. Apple would have to add some some sort of equipment specific tier to Fitness+ classes for a premium fee otherwise they would be buying their existing customers and the liability of supporting an installed base of already purchased equipment with the possibility of peak sales behind them.Big fat profit from hardware with huge markups... plus ongoing, pretty-much-must-pay-to-use-it, big fat subscription profit from "services"? Yes, I see no fit.
Arm-NVIDIA Deal: Everything You Need to Know - EETimes
EETimes discusses what would happen to the technology industry if the Arm-NVIDIA deal goes through. Visit to learn more about the merger.
Then ARM Holdings is in a big trouble as they really need financial and R&D support from Nvidia. Too bad for them and Apple really dont need ARM anyway.
LOL. Apple would be an even bigger and faster regulatory hurdle FAIL than Nvidia was.
At least Nvidia has some fig leaf story about how they wanted to keep Arm independent . That 'big lie' wouldn't even be remotely creditable coming out of Apple.
The folks proposing it is not because they think Apple is entitled. They'd be proposing because mostly ignorant of what it would take to get the deal done.
Apple has a relatively minor stake contributor to some very broad coalition that took Arm pro could perhaps pass regulatory scrutiny. No one major player was buying it. However, any one of the major Arm architectural license holders would go do same rabbit hole that Nvidia went down on. Those too would fail for very similar reasons.
Arm-NVIDIA Deal: Everything You Need to Know - EETimes
EETimes discusses what would happen to the technology industry if the Arm-NVIDIA deal goes through. Visit to learn more about the merger.www.eetimes.com
Then ARM Holdings is in a big trouble as they really need financial and R&D support from Nvidia. Too bad for them and Apple really dont need ARM anyway.
This is mainly smoke and mirrors to try to get the Nvidia deal to go through.
The real major huge problem here is that if someone has to bail Softbank out for over paying for Arm in the first place then the effective "loan" that would be thrown on top of Arm could be onerous enough to get in the way of healthy intermediate term growth for Arm. Or is Softbank can't find a "bigger fool" to unload Arm off to , then Softbank will start to vulture capital Arm and suck them dry like a vampire. Regardless the primary crux of the problem is saving Softbank from the Arm and other investments that they have made that have gone multibillion bust.
Arm the company would like to have a "have cake and eat it too" situation where someone just dumps money in over the wall and not have to answer to stockholders at quarterly finance meeting calls.
The second major issues is that Arm is essentially a contract R&D company. If try to turn them into a "hot chip selling" stock then pressure will come to kill long term R&D for short term payouts. Essentially to do what they don't do well. If they were a "Not for Profit" private company it would probably work OK ( might have to raise the licensing fees a bit and get some "upfront" funding fees. ) [ That goes back to the first problem because there is no "erase my mistake" there for Softbank. ]
Just delaying the inevitable here. Clearly SoftBank wants out. There’s no other good options for a buyer. SB will probably just spin them off as a separate entity where they will function for seven years before selling themselves to nvidia because they’re nearly bankrupt.
Maybe IBM and Motorola and Apple could form a grand alliance and ressurrect PowerPC from ARM and rule the world! HAHA!
Just kidding. But would IBM be interested at all?
Just kidding. But would IBM be interested at all?
Nah, regulatory blocks that scuppered Nvidia would certainly apply to Apple and Intel too.
Softbank have a real problem now trying to sell ARM.
Sonos is a low end consumer product that is overpriced for what it is. Case and point in the Sonos Port at $450. When you pick it up or any of their products they feel cheap. They do have a great marketing department as everyone wants their product. The software is very good, but the hardware not so much.
If Peleton was making big fat profits with huge profits out into the immediate future they wouldn't need anyone to buy them.
If shut down all the contract manufacturing and have a substantive amount of inventory trapped on ships floating in the ocean going nowhere.... that doesn't lead to big fat profits.
Strange. Facebook, Google and Microsoft had (successfully) made BIGGER and far-reaching acquisitions... and yet those Big Boys get away with it? The regulators have done zero to reign in their acquisition appetites. One perfect example is FB acquiring Instagram without much of a fight. Years later, everyone acknowledges just how much FB/Insta affects negatively on teens, children, etc. These are not just regulators, you have scientists and studies acknowledging just how negatively apps like Instagram and Facebook (both owned by Meta Zuckerberg) affects minors.
And then you have smaller market-cap companies like Nvidia... and they get stomped by the Regulators. Why did they get stomped so easily and decisively? Maybe because they didn't spend the millions upon millions to bribe the US Senators. That's why?
Meta, Microsoft, Amazon record spending on lobbying...
There are plenty of good prospects. There just aren't any who don't have any sense to pay as much as Softbank did for Arm ( let alone pay even more on top of that to bail Softbank out of its other bad investments. ).
There is an out where Softbank takes a hit for making bad investments. One of the major problems here is that Softbank want someone to hand them money to bail them out of some bad investments they made. No consequences for making bad decisions.
That is substantially different than just jumping out of the business don't want to be in anymore.
If Arm is a separate entity they can set their own prices. Again part of the problem here is that some of the architecture license holders and few others aren't really paying enough. And Arm needs to avoid doing certain things ( like investing in Ampere... not sure if Ampere paid bills with their stock or someone at Arm was 'high' and actually shoveled money into Ampere. )
Bankruptcy still won't remove the regulatory problems. Buying assets in a bankruptcy sale in no way negates anti-trust laws or regulations.
If Arm was a private company that managed themselves as a "not for profit" ( plow the profts back into R&D) then pretty good chance they wouldn't go into bankruptcy in seven years. The problem is where there is some huge debt or obligation to outside entities who are willing to suck it dry and kill it to get paid back. Those folks would likely "eat the seed corn" and underfund reasearch.
The problem is that Arm isn't really a "high stock price with super growth" kind of company. If try to treat it that will then will probably kill it. What they do isn't the problem. Treating as something they are not is one of the core major problems.
Those acquisitions are not buying a "community asset". Arms core business is about doing R&D cost sharing among a wide number of companies. They basically do contract R&D for a whole community of folks. So the issue is how they get "bought" so that do not disrupt that.
Selling to any one of the major players who directly use Arm disrupts that. If Arm just made generic widgets or a product and there was multiple widget sellers out there then there would be a clear path possibly buying them up. However, one company at the nexus point is a natural chokepoint.
Even more so, overpaying for Arm is a big red flag. Paying too much and saying not going to ask for a complete return on investment because just benvolently just going to "make it rain" on Arm by just throw money at it and asking not much for return. Well can do that without buying it. Just give them the money.
completely different nexus. Instagram was in no way shape or form integral to all of the other major tech players out there. Instagram was really less than 2-300 person operation when they got bought. the bulk of it was running on AWS and other services.
Instagram big problem was that they were not making money to cover their burn rate. Selling out to Facebook was a way to pay off the investors that had been funding the "burn money" enterprise.
I'm pretty sure that what happened with Nvidia is why Apple didn't try to buy ARM, despite it seeming like it would be a great fit. If Nvidia can't get approved, Apple has even less of a chance of passing the regulators.
Cryptocraze , AI/ML + High Performance Computing , and hypetrain are major factors that lead to a higher market capitalization . A future that isn't coupled to something as well known as studied as Windows PCs and generic cloud servers. So there are more stock buyers than there is stock ... so inflation pricing.
Not completely unrelated though. That was probably one factor why Nvidia didn't mind substantively overpaying for Arm largely with "Monopoly game" money ( stocks) . Over half of the $40B purchase was being made in $22B in stock. Only about $15B was in hard cash.
The Arm purchase was largely a way to funnel a big gigantic block of Nvidia stock to Softbank. The Nvidia stock was inflated so the any dilution probably wouldn't hurt Nvidia long term. In fact, would give them a better hype story as to why the stock was so high. (Nvidia has finger on the throat of Arm so could dominate their competitors if they really wanted to... so they "can't loose". )
If Nvidia had to pay $32-40 B in cash for Arm this deal never would have happened. It would have made no sense. Stockholder dilution.
Nvidia is still up significantly since the point in time the deal was announced but the hype train for Nvidia could be slowing down. Crypto isn't the "print money" driver into the distant future anymore (at least for generic off-the-shelf GPUs). Ai/ML isn't all about doing training/inferencing in remote data centers anymore. If Intel gets some traction in discete GPUs then Nvidia will have smaller share of that market.
Nvidia isn't doomed by any means, but the hype train driving the stock doesn't have as much steam. Nvidia has less "Monopoly game" money to indiscriminately to throw around. Throw on top the regulatory problems and it isn't surprising they are backpedaling from the deal.
The breakup fee is around $2B . If that is $2B helps cover Arm R&D for several years it is probably worth it long term to Nvidia's long term projects. They get a return without having to hand over $12B in cash upfront.
Any buyer needs to have big pockets and be outside the industry (and especially cannot be a company that uses Arm technology) in order pass regulatory muster. It would ideally be a company that has a track record of running great companies and has the financial acumen to run what is essentially a licensing company. In other words, a company like Berkshire Hathaway, which may want to modernize its portfolio of diverse businesses and has reently expressed an interest in making a large purchases (ideally of gate-keeper type of companies with large competitive advantages). Berkshire would demand a substantial discount to purchase it and I and am not sure if Softbank is feeling desperate enough to unload it at that kind of a price.
Apple created Arm and provided all of its financing.
A poll feature in general for some stories or rumors would be interesting on here...