NVIDIA’s interest in ARM is not just any one, not only is it a perfect acquisition for Jen-Hsung Huang’s company by complementing its resources and skills over existing ones, but it also means turning the hardware market upside down where dozens of companies owe their future to ARM continuing to license their cores as they have done before.
The fear that NVIDIA will turn ARM into a subsidiary only for its use in the medium or long term has put many companies in the sector in all parts of the world on alert, causing regulatory mechanisms around the world to have put “awaiting” the formal completion of the agreement.
Is it possible that the purchase of the decade in terms of the hardware market ends up being a kind of failed marriage because of the regulatory committees in different parts of the world?
The European Union puts sticks to the wheels of the NVIDIA-ARM agreement
According to the British newspaper The Telegraph, the European Commission and specifically the competition regulators, after taking holidays on Monday of this week. So the European Union has not even begun to analyze the purchase of ARM by NVIDIA. The reason behind this is that NVIDIA would not have submitted all the necessary documentation requested by European regulators, which has delayed the review for the approval of the operation until September.
In the event that the regulation analysis begins in September, it would not be immediate and would take at least six months or more to complete. So NVIDIA would receive the approval of the European Union well into 2022. A scenario that is also the most optimistic of all.
On the other hand, NVIDIA needs to conclude the agreement once and for all in order to create its own fully integrated NVIDIA CPUs, GPUs and DPUs in all kinds of markets. From powerful supercomputers, servers and data centers to handheld devices and who knows if the successor to the current Nintendo Switch. It must also be taken into account that both the current holder of ARM, Softbank, as well as the board of ARM itself agree to be part of NVIDIA.
ARM would be in trouble if the NVIDIA deal failed
If the agreement between NVIDIA and ARM were to fail because of the European Union, then it is possible that ARM would enter into a public offering, since SoftBank is interested in selling the company. The interest of another company in the sector, such as Qualcomm that has also shown interest, could have the same regulatory effect.
In order to secure the purchase from NVIDIA they have presented evidence to support the $ 40 billion purchase of ARM Holdings. NVIDIA’s argument for building the case in its favor and having the purchase approved claims that ARM is “completely stuck in the mud” and that it will be unable to get larger investors to allow it to compete head-on against the US giants, by not doing so. only reference to Intel and AMD, but also to Apple and Qualcomm.
Although the licensing of ARM technology is apparently one of the most lucrative businesses in the hardware market. The reality is that Softbank has managed to handle its enormous potential well. Furthermore, the threat of RISC-V as a possible replacement for ARM in certain markets also threatens the future of this ISA.