The Federal Trade Commission today sued to block U.S. chip supplier Nvidia Corp.’s $40 billion acquisition of U.K. chip design provider Arm Ltd. Semiconductor chips power the computers and technologies that are essential to our modern economy and society. The proposed vertical deal would give one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips. The FTC’s complaint alleges that the combined firm would have the means and incentive to stifle innovative next-generation technologies, including those used to run datacenters and driver-assistance systems in cars.
It seems increasingly unlikely that this acquisition will go through. I think that’s a good thing – while I’d rather Nvidia purchase ARM than Apple, Google, Microsoft, or Amazon, an even better outcome would be a profitable, independent ARM.
Definitely a good thing. There is very little hope of nVidia running ARM independently after they do the purchase. And if they are not going to use the know how directly, the deal does not make sense for them.
In other words, current nvidia profit margin is much higher than ARM. Yes they have cash, and don’t know what to do with it, but investing in a “hands off” company is probably not the best use of their resources. Hence, I would expect them to be very hands on with ARM.
And… that would be a bad thing for the industry (except for RISC-V, maybe).
disclaimer: I have some (negligible) nvidia stock, so that makes me part of this deal.
I don’t think you can safely bet it’s a good thing yet. What if the deal falls through, and then Apple, Microsoft, etc. simply buy a controlling share during the IPO?
Buying large shares are also subject to scrutiny. Even 5% owners need to report these to SEC: https://www.sec.gov/smallbusiness/goingpublic/officersanddirectors
What about the free market that regulate itself quite naturally for the greater good ?
Fantasy world free market, maybe.
They kinda do, actually… when there is competition.
Take our ESRB. The industry self regulates game ratings, and compared to state regulation it is arguably much better. Unlike Australia, or Germany, pretty much no game is banned here (except few court ordered bans).
And it is not a new thing, or even a free market thing. Since the age of guilds, many industries have self regulated.
The problem is, this assumes there is a healthy body of competitors. If there is a monopoly, or something like it, things obviously fail.
That’s a total fantasy that some of my fellow libertarians and some political conservatives have created. I think someone once called it rapacious capitalism. I am champion of capitalism but not unregulated out of control predatory capitalism like this.
I, personally, think it would benefit from being bought by the UK government.
The123king,
+1, well done 🙂
@The123king
I agree, but given that state ownership of anything is for the most part frowned upon by all three major parties in the UK it’s not likely.
But the fantasy of ARM being nationalised, renamed to Acorn and then a new BBC computer designed by Acorn being promoted heavily and used in schools makes me smile just a little
The UK under the Tories for some decades has persistently and consistently and aggressively avoided anything which smacks of strategic regulation and progressive tax and welfare policies. Governments of all flavours including Labour bought into the post-Thatcherite dogma. Not one of them has negotiated a decent contract or obtained legally binding assurances in writing when it comes to national projects or takeovers. A lot of this is due to the lack of a written constitution, billionaire owned media, and increasingly polarised politics under a FPTP system. The ARM sell off and Brexit are two sides of the same unpleasant coin.
Nobody who owned ARM needed the money. It’s a bit late for Hermann Hauser to call for the government to take over ARM and very unlikely under the current government who are unfit to hold any public office. Don’t get me started on the Brexit supporting “I’m Alright Jack’s” Ratcliffe and Dyson.
@Hollie
We have a constitution, what purpose would a written one serve?
I say “we” as I am British and own two British registered corporations, however I live in the EU.
Please stick to the story at hand and not veer into personal politics.
@Adurbe
Who are you? What country do you originate and live in and how old are you? What do you know about UK laws and governance failings and social policy? What do you know about historical incidents? The list goes on. So before you open your fat gob and begin telling other people what to say please do check the policies and policy development of the UK. I cannot comment for anyone else’s contributions but I don’t think anyone will be suing me for libel based off any single sentence or collection of sentences in my comment which is pretty much on topic and a focused distillation of around 40+ years of UK politics and explains the background and reasoning for the current mess. You do better or park it.
“Here I am telling you not to tell people what to do” – Holly the OSNews idiot, 2021
There are none so blind as those who will not see.
Yeah you must be new here, buddy. Veering into politics is what this site does best…
Only member since 2005
Open polical hostility and personal attracks used to be self managed by the voting system back then…
I feel that due to “crypto mining” Nvidia is flooded with cash. As such they will likely takeover ARM. Or will do something similar in the terms of the scale and importance in the future.
In America, they just have to buy the right politician, and the regulators will back right off. This isn’t even hard to predict. I think Thom is thinking of some other America.
Upside of an nVidia bid failure: Independent ARM, and more freedom
Downside: Possibly under capitalized/weakened ARM, and an eventual buyout from someone worse.
The downside risk seems larger, IMHO. Everything is balance, and I’m not sure the upside is larger than the downside here.