Didn’t see this one coming, but on reflection perhaps it makes perfect sense. In the near future, we could potentially see a shift in the computer component industry that would perhaps be the biggest shakeup since AMD bought Ati back in 2006. The graphics card giant Nvidia is reportedly weighing up the possibility of acquiring chip designer Arm, according to this latest report from Bloomberg.
As always with these kinds of reports, it’d probably best to take it with a pinch of salt until it’s finalized. Even if both parties were ready to go ahead with this acquisition, there are various different legal and regulatory processes that would have to be completed before things would be set in stone.
Arm is based in the UK but was bought by the Japanese tech conglomerate SoftBank in 2016. Reportedly SoftBank is now looking to sell, and it would be fairly logical to imagine that Nvidia would be interested in buying. Arm is the designer of CPU cores that power millions of modern devices. Arm-based chip designs are used in Phones, Tablets, Chromebooks, set-top boxes, Smart TVs, and many more product categories.
Nvidia already has Arm designed chips integrated into their hardware stack, with their Tegra line of SOCs using Arm-based processor cores. The Tegra chips are used in devices like phones and tablets, but also in vehicles, the Nintendo switch, and set-top boxes.
Beyond their existing product lineup having some synergy with Arm, it would also absolutely strengthen Nvidia’s strategic position going forward if they had a degree of control of CPU manufacturing. Arm-based chips specifically are going to be powering Apple devices for at least the next generation, with not only their iPhones and iPads using Arm-based chips but with the news that they have begun the process of transitioning their Mac and Macbook lines to this architecture. According to Bloomberg, Apple was approached to make an offer for Arm, however, they declined, instead opting to continue to license Arm chip designs, for their processors that they manufacture themselves.
Microsoft too has shown signs of hedging their bets that Arm-based devices could be the future of computing, as they’ve been working hard on making Windows on Arm more viable. It’s not there yet, but it’s not crazy to imagine a world where Windows on Arm devices could become commonplace.
Why Would Nvidia Be Interested In Buying Arm?
If Nvidia wishes to grow further beyond the scope of just being a graphics card company, this move makes perfect sense, it would put them at the forefront of market sectors that as of now they are a small player in, specifically mobile devices. It would also place them in an excellent position for control of all the major hardware that could be going into the laptops and desktops of tomorrow.
Whether or not this would have any kind of immediate knock-on effect for their operations as a GPU manufacturer is unclear, but we can’t imagine their dominance in the space of high-end consumer gaming cards being seriously challenged any time soon. AMD has struggled to keep up with Nvidia in recent years, and it feels like Intel has been talking about producing gaming level graphics hardware for years, but it’s not something that they’ve delivered on.
As with any major potential acquisition like this, there are going to be fears over whether this could result in one firm having too much power, and I don’t think those fears would be unfounded in this case. Whether a deal like this would pass regulatory scrutiny would to some extent depend on what level of monopolistic control the resulting combined company would have, and in the case, the answer would “yes probably quite a bit of monopolistic control”.
Until anything is officially announced, probably best to file this one under “wait and see what happens”, where these kinds of deals can end up being somewhat up in the air, right down to the wire. With these huge sums of money, power, and potentially even egos involved, large tech acquisitions are not always a straightforward process. This would leave Nvidia as a massively powerful company in the world of computing, and there are plenty of interesting possibilities with regards to future products that this acquisition could facilitate, but there would be plenty of risks too.