It seems like an agreement is now to be concluded among SoftBank and Nvidia following weeks of rumors regarding the prospects of ARM, encouraging GPU makers to buy ARM, which will be among the costly technical acquisitions in its lifetime. Any deal involving technology companies must be faced with the satisfaction of regulatory standards, but Nvidia probably bets that policymakers and regulators will be convinced.
In a Wall Street Journal article, SoftBank and Nvidia are about to confirm the deal to buy ARM costing $40 billion in fast cash as well as a transaction in stock is going to take place for the graphical giant. For almost $31 billion, SoftBank purchased ARM in 2016, and in past months the Bank has been in search to offload the design of the chip and IP business to reduce losses. The potential buyer seemed to be Nvidia, as it rapidly emerged.
Although the conditions of the agreement remain to be announced, a formal notice should arrive no longer than next week. There is no question that the agreement will be reviewed and regulatory approval is required. ARM’s co-founder stated that a takeover by Nvidia is going to be a mistake and ARM is to be returned to the United Kingdom.
The preservation of ARM neutrality in licensing their chip designs as well as IP is a big problem that can arise from its acquisition. SoftBank is not a manufacturer of the chip and is not as competitive as other manufacturers, including Broadcom, Samsung, Intel, Qualcomm, and Apple. All the mentioned companies are licensees of ARM.
Nvidia acquiring an entity which has an impact on a vast and significant environment, on which the market relies, can be seen as contradictory and will probably raise questions.
Nvidia has proven that its vertical integration is expected to proceed and advance in the area of Artificial Intelligence, computer, the infrastructure of the data center, supercomputer, and high-performance systems. To scale its goals, the company has made many acquisitions, not only over its GPUs but also over its networking and tech stack. Mellanox Technology and Cumulus Network have been recently purchased by Nvidia and placed under the name Nvidia Network. The ultimate objective is to tighten up the networking hardware and applications of Nvidia’s HPC platforms.