If Nvidia is already the absolute leader in the PC graphics card market, imagine the power they would have if they bought ARM (the company that designs the architecture of all smartphone processors). And why do we say this? Well, because Nvidia itself announced in 2020 that they were buying ARM for 40 billion dollars. However, the purchase was pending approval by the regulators of different countries that had to decide if this movement broke the market and put Nvidia in a too dominant position.
Well, the regulators have already decided: Nvidia’s purchase of ARM is cancelled . As the graphics company has announced on its website, the previously planned operation to acquire the ARM chip giant from SoftBank is officially canceled due to “significant regulatory problems” that prevent both companies from continuing with the agreement.
Why couldn’t Nvidia buy ARM?
The European Union and the US FTC have been the main bodies that have prevented Nvidia from buying ARM. The reason is quite simple: with this purchase Nvidia was going to have too much power both in the graphics card business and in the mobile chip market , since ARM practically equips all smartphones, tablets and even some Apple computers with its chip architecture.
Nvidia had been trying to close this operation for more than a year, but the opposition of regulators and large companies such as Microsoft and Qualcomm , who strongly criticized the purchase, finally made them give up.
Now, Nvidia will have to pay $1.25 billion to SoftBank as compensation for not completing the transaction. The good thing for Nvidia is that they will keep one of the ARM licenses for 20 years. On the other hand, the CEO of ARM, Simon Segars has left his post to be replaced by the head of IP (intellectual property) of ARM, Rene Haas, who coincidentally had worked at Nvidia a few years ago.
Who will buy ARM now? SoftBank has announced a change of plans in this regard. Because they can’t sell it to another multinational that already has a dominant position in a market, ARM will go public with an initial public offering for the fiscal year beginning April 1 . In this way, the chip design company will keep all its licenses and patented technologies, but will begin to receive financial support from other large companies.
Source | NVIDIA
