[UPDATE on 09/02/2022] NVIDIA and SoftBank has officially announced that the ARM acquisition bid from NVIDIA will not go through! Read SoftBank’s statement here.
NVIDIA, the world’s largest graphics chip maker, expressed their interest in acquiring ARM, the people behind some of the world’s most powerful mobile chips currently, back in 2020. It was not just an expressed interest though; they really started the whole process of acquiring the chip designers from 2020 onward. It became a whole thing too through 2021.
To be fair, the concerns that were raised by multiple parties regarding the acquisition efforts were not baseless. Companies like Qualcomm, Microsoft, even Samsung and Apple rely on ARM’s chip architecture and designs for their processing chips. It makes sense then that Qualcomm and even Microsoft would have objected the acquisition efforts. The purchase could have led to a massive imbalance in the chip business, since ARM is a key player in the chip making industry. If the purchase went through, it would have been the biggest ever in the chip business too with Softbank selling it at US$ 66 billion.
There were also a lot of regulatory issues that were raised prior to 2022 regarding the purchase. Investigations were also launched by United Kingdom, United States, and European Union as well regarding the acquisition. They raised concerns of anti-competition efforts and market monopoly despite NVIDIA promising that ARM’s deal with all its customers will still be honoured and it will be business as usual.
There are no official announcements just yet on the deal not going through. NVIDIA, ARM, and SoftBank have not commented on the reports that first broke on Financial Times. According to early reports too, SoftBank, ARM’s owners will be receiving US$ 1.25 billion from NVIDIA for failing the acquisition bid.
The falling through of the deal should be a relief to many in the tech industry. It means that Apple, Qualcomm, Intel, Samsung, and plenty of other key chip manufacturers can sleep soundly as their deal with ARM continue without NVIDIA’s intervention. Their relief is another person’s headache though, in this case probably two. SoftBank is still selling ARM, but given the significance of ARM in the industry, selling the chip designers will be a tall order. As for NVIDIA, their stock prices might tank once the fall through is official, but it is NVIDIA after all, they should bounce back quickly enough. If you want to know more about the acquisition bid, you can head over to NVIDIA’s blog.
Source: 9 to 5 Mac, ars Technica, The Verge
