The problem is that ARM is a hot potato that, although it can be bought by anyone with sufficient capital, represents a big enough change in the ecosystem that it raises the alarms of any regulatory body regardless of who the buyer is.
What is happening would have happened anyway if any of the other companies in the sector had dared to buy the company that is currently owned by SoftBank, which is totally undervalued with respect to its value and capacity. It can be said that they have enormous potential, but at the same time that Europe’s largest hardware company does not fail, it depends on NVIDIA saving it from its own incapacity.
NVIDIA doesn’t really need ARM
This statement may be shocking since the company led by Jensen Huang has put more than 40,000 million dollars on the table to buy the British company, but the reality is that if we look at the potential evolution of both to Future time we will see that precisely ARM does not come out very well.
But why does NVIDIA want to buy ARM if it doesn’t really need it? What they are looking for is to have the human resources in technology and processes as well as their development skills. At heart we are talking about a bargain, a company that has the potential of the design of an AMD or an Intel, but with a much lower capitalization and value. A sweet and tempting candy that complements the capabilities of Jensen Huang’s company.
If we look at Intel and AMD they already have those resources and processes developed years ago from the moment they were CPU designers decades ago. In the case of Intel, for example, they have decided to develop their GPU division by hiring industry experts and creating a new division that has taken many years of time and investment. NVIDIA instead wants to step on the accelerator and the best way is to buy from ARM.
The future ARM situation is delicate
Currently ARM is much worse than people think, since over time Advanced RISC Machines has lost competitiveness when it comes to creating new processors internally, it is as if suddenly Intel was unable to make cores competitive and lived on a royalty to third parties that would allow it to subsist.
So Softbank, in order to avoid a collapse of the company in the future, has to find a solution to its lack of competitiveness. The reason is that your licensees are no longer just your customers but also your competition and they are stealing market share from you. So if ARM does not reach the level required in this competitive market, it will gradually lose important customers and the incentive to create new nuclei.
To this we must add that the brake on the purchase of ARM by NVIDIA is affecting many of its future projects as an independent company. The safest thing is that future Neoverse cores will be canceled in favor of the NVIDIA Grace that has been in development for a long time and all due to the fact that they will not maintain two identical projects for the same market.
Meanwhile, NVIDIA seeks to convince regulators in Europe
Regarding the current situation, we can say that the soap opera of the purchase of ARM by NVIDIA continues. As we all know, the impact on the industry is so great that regulatory bodies have been against the agreement, delaying both the signing of it and affecting the future projects of both companies.
In the case of the European Commission, it seems that they will begin a four-month investigation to decide if they are going to approve the purchase and the operation after being blocked for a long time. And it is that on the part of NVIDIA they would be looking for a way to convince the regulation algorithms. It is said that, for example, in the case of the United Kingdom, they plan to invest 100 million dollars in the most powerful supercomputer in that country, but it has not been said that there are deals between Jensen Huang’s company and the union’s regulators.
It is therefore an atypical situation, since we do not know if these deals are a request by the different organizations or, failing that, it is that the largest GPU manufacturer in the world tries to win their sympathy in order to finalize the purchase. In any case, it is still a continuous wear and tear for ARM, while NVIDIA has all the time in the world, although on the other hand, the purchase date has a limit and it is approaching.
