On February 8, the Financial Times reported that three people familiar with the matter said that SoftBank's deal to sell ARM to Nvidia for $66 billion failed on Monday, and SoftBank would receive a break-up fee of $1.25 billion (8 billion yuan).
Sources said the failure of the deal would lead to turmoil in ARM's management, with the CEO position to be replaced by René Haas, head of the intellectual property division. This also caused SoftBank to miss a large amount of stock income, and Nvidia's acquisition agreement included Nvidia's shares. Nvidia's stock price soared last year, at one point bringing ARM's total revenue to a peak of $87 billion, which is more than just $1.25 billion in breakup costs.
(Source: unsplash)
This transaction must be approved by regulators such as the United States, the United Kingdom, and the European Union, and also approved by China, which is really difficult. Japan's SoftBank was able to successfully acquire ARM in large part because it was more of a strategic investment and it was not a hardware- or software-focused tech company itself. Even if ARM is acquired, it will not have a greater impact on ARM's original business.
NVIDIA is completely different, NVIDIA's graphics card, CPU and other products are directly involved in many chips. ARM is the underlying architecture of many mobile chips, and the M series chips on Apple's Mac are directly using the ARM architecture, and the power consumption has dropped significantly. The best-selling Nintendo Switch also uses NVIDIA chips. If Nvidia acquires ARM, it will inevitably use the latest ARM architecture as soon as possible, or it will have a long period of exclusivity, which is a great advantage over competitors.
If Nvidia acquires ARM, competitors will not dare to bet on the ARM architecture. At this stage, some companies are still quite dependent on the ARM architecture, and the chips are designed based on the ARM underlying. NVIDIA's acquisition has also sounded a wake-up call for chip design companies, and ARM may also be acquired by competitors, and these chip design companies need to find new underlying architectures.
A potential alternative is the RISC-V architecture, an open source instruction set architecture that is free to be used for any purpose without having to pay any company royalties. After the ARM incident, or more companies are embarking on a second set of solutions, open source instruction sets are a good choice.