Chip designer Arm has been on the chopping block for almost a month now as the current owner, Japanese holding company SoftBank, looks to sell it off. Now, the British publication Evening Standard says the acquisition is on course to be complete by “the end of the summer.”
The Standard notes that SoftBank put Arm up for sale back in April. Softbank struggled, especially after its investment in WeWork failed; to recoup costs, hired Goldman Sachs to look for buyers for some of its holdings. The company approached Apple; it then tried to assemble a group of buyers including Nvidia. Now, though, Nvidia is the only interested buyer. According to the Standard, SoftBank is looking for over $50 billion USD. That’s almost double what the firm paid when it acquired Arm in 2016. Other publications put the number closer to the $32 billion SoftBank actually paid.
Arm’s co-founder Tudor Brown told the New Statesman that “[SoftBank] put too much money into it, spent money on things that clearly–in my opinion–weren’t going to make money in the short term, and now suddenly they’re saying ‘oh, dear me, this company isn’t performing well.”
The deal could cause quite a few headaches. The Standard notes that the British government pushed SoftBank to keep Arm in the UK to preserve its domestic workforce. It’s unclear whether that will continue with Nvidia. The Standard also notes that the UK wants to secure the deal ahead of its European Union exit in 2021. Elsewhere in the world, there’s lots of room for regulatory concerns. As we’ve previously noted, Arm has supplied chip designs and instruction sets for many tech companies. Not just Nvidia, but AMD, Apple, Qualcomm, Samsung, and more. Nvidia owning a company that has business deals with its direct competitors would likely raise regulatory concerns about fair competition.
With that said, purchasing Arm could give Nvidia a path to make its own SoCs; the company shifted in recent years from a graphics-only focus to moving into datacenters with HPC GPUs, as well as making moves in artificial intelligence and automobile control. One space it can’t currently compete with AMD or Intel is in the CPU space. An Arm acquisition could let Nvidia worm its way into all kinds of devices, from game consoles (both the Xbox Series X and PlayStation 5 are based on AMD’s Zen 3 and RDNA 2 architectures) to smartphones, and more. Apple announced a shift to Arm-based CPUs earlier this year–is it that hard to imagine Nvidia releasing a laptop powered by its own Arm-based chips, especially as Microsoft is actively working on getting Windows running on Arm?
This seems like it’ll be a fast-moving deal–right up until it gets hung up in regulatory talks.