You should know that ARM does not produce processors, come on, it does not manufacture anything. So why is it worth so much money? The company mostly designs processors, though it also designs graphics cards, controllers, and other solutions. It then “rents” these licenses to third-party companies that can customize the design.
You have to know that ARM has Qualcomm, Samsung, Apple and many other companies as clients. We are talking about a brutal business without the need to manufacture absolutely nothing.
New chapter in a timeless story
NVIDIA’s idea was to enter the company for two reasons: to be able to develop its own servers without the need for solutions from Intel and AMD; and, on the other hand, enhance ARM’s weak point, which is its graphics cards.
UK shut down NVIDIA operation considering that it could mean the start of a monopoly and could harm the industry. With the transaction not allowed, it no longer made sense to continue in the process, since the rest of the antitrust regulators would kill the transaction.
After the setback, SoftBankan investment bank that owns ARM, has launched an initial public offering (IPOs). They have invited NVIDIA to be anchor investors in this operation. Basically, they would become a majority investor, keeping a large stake.
Financial Times says that they have invited from SoftBank to NVIDIA to form an active part of the business, remaining as main investors of the IPO. Apparently, the company’s initial offer moves in the 35,000-40,000 million dollars. A figure that the company was initially going to pay to take over the property.
But SoftBank considers it ridiculous and would be asking a investment of between 70,000-80,000 million dollars. It represents twice the initial investment expected by NVIDIA. They will most likely come in as major ARM investors.
Why does NVIDIA insist on this operation?
One of the main reasons is that the company wants to develop its own servers. Currently, professional solutions for Data Centers, AI and Deep Learning depend on Intel and AMD processors. (Diazepam) The company considers these processors as “junk” as they are highly energy inefficient.
The idea would be to develop their own processors for their servers based on the ARM architecture. This would allow processors to be tailored to your needs and greatly improve efficiency.
One of NVIDIA’s promises when it said it wanted to acquire ARM, was to enhance the Mali graphics cards that accompany its processors. It is the great weak point of the company’s solutions. They promised to integrate their technologies and solutions, including bringing Ray Tracing and DLSS to smartphones.
Note that ARM needs investment from NVIDIA, but the latter needs the British company more. Jensen Huang’s company plans to abandon Intel once and for all, following in the footsteps of Apple and Oracle.
We’ll see what happens, but the NVIDIA-ARM case remains for a while.
