SoftBank has been rumored to be exploring a sale of ARM — the British chip designer that powers nearly every major mobile processor from companies like Qualcomm, Apple, Samsung, and Huawei — and now, it might have found a buyer. Nvidia is reportedly in “advanced talks” to buy ARM in a deal worth over $32 billion, according to Bloomberg.
Nvidia is said to be the only company that’s involved in concrete discussions with SoftBank for the purchase at this time, and a deal could arrive “in the next few weeks,” although nothing is finalized yet. If the deal does go through, it would be one of the largest deals ever in the computer chip business and would likely draw intense regulatory scrutiny.
It’s not the worst option.
I believe my theory Nvidia will use ARM licensing as leverage to make Apple certify their GPU drivers on OSX even more now.
In a business perspective I do not think there is still much incentive to do so now, the only Mac still on sale and that could take nVidia cards is the new Mac Pro, the older Mac Pros that could have are not supported by Mac OS anymore. I believe Apple is heading to use its own integrated GPU solutions in the future with it’s ARM / SOC chips.
In the other end, if nVidia acquires ARM, they could propose a new level of integration of GPUs with ARM so in that case maybe, if Apple cannot reach the same level of performance on their own,
I think you’re forgetting about egpus; something OSX officially supports. I haven’t run the numbers lately, but I think they’re still way cheaper than any factory Apple option.
Apple won’t care… they will just switch entirely to AMD GPUs…. since AMD doens’t suck as a bussiness and works for win-win cooperation…. AMD has a really strong custom department compared to Nvidia which essentially killed theirs by being jerks to their customers.
AMD is also apparently developing mobile GPUs I would not be entirely supprised if Apple licenses it..
No but it’s a long long way from the best option, or a good option. Nvidia have hardly proved to be a model corporate citizen in their time.
I am not 100% sure it is not the a bad option.
ARM being bought by Intel, AMD, or Apple would have come with necessary guarantees to keep the platform open. Otherwise it would be nigh impossible to pass US or EU approvals.
On the other hand nVidia might not be subject to the same standards, since in theory they are not a competitor.
Softbank apparently tried to leverage their ARM position to get some loans:
https://techcrunch.com/2019/06/12/arm-shows-softbank-does-tech-pe-the-right-way/
It did not work out. And since Softbank is perpetually in red, they need the cash fast. Whoever comes with the mullah will unfortunately have ARM, since the seller’s hands are tied.
If nVidia does a leveraged (i.e.: debt based) buyout then they will have to milk ARM dry.
[ edit: nvidia does not have enough cast on hand: https://www.macrotrends.net/stocks/charts/NVDA/nvidia/cash-on-hand . The other alternative is a stock deal, but that might not be a direct solution to Softbank’s problems ].
sukru,
US isn’t doing much antitrust enforcement these days, If a US company has the opportunity and means to buy ARM, I think US regulators will ultimately welcome it. Considering the transfer would be between Japanese and American corporate owners, I’m not actually sure what the EU could do about it? I don’t see how they could rule on transactions outside their jurisdiction. Punitive damages for the US companies involved? ARM tariffs? Bombing raids? Haha, let me know.
Well, just the perceived threat of antitrust will make companies stay in line. Look at how Intel has kept AMD alive (although nowadays they no longer have the lead). And EU is known to interfere in everything.
On the other hand leveraged buyouts cause much more stress on the companies. According to one research it causes 20% chance of bankruptcy vs 2% baseline: https://www.institutionalinvestor.com/article/b1gfygl4r8661f/LBOs-Make-More-Companies-Go-Bankrupt-Research-Shows
Even if they don’t go bankrupt, being continuously milked to pay off debts of the owner company quickly stifles innovation and reduces good practices in the bought out one.
I would not have the same objection if nVidia were to offer cash to do the purchase.
Intel kept AMD alive…. that’s some special logic… perhaps you mean didn’t sue them out of existence because they need a second source/competitor or they’ll lose contracts.
The fact is Intel almost sunk AMD with OEM back alley deals.
> continuously milked to pay off debts of the owner company quickly stifles innovation
Since when do companies that do LBOs care about that?
That was my point.
If nVidia turns out to do a LBO of ARM, they would have almost zero incentive to invest in R&D. They would instead need to milk ARM investment as much as possible to deleverage.
Chinese will not allow any US company (not Nvidia, not Intel, not Apple) to buy ARM, just like they have blocked Qualcomm NXP merger. How is Nvidia planning to go around that?
They won’t… most likely buyer is TSMC.