Why NVIDIA’s Planned Acquisition of Arm Has Collapsed

In September 2020, NVIDIA announced its intention to acquire Arm in a groundbreaking $40 billion deal. When this news became public, several companies, including Google, Microsoft, and Apple, aired their concerns about the merger.

This was soon followed by several months of regulatory hurdles and investigations. Then, as NVIDIA’s March 2022 deadline loomed large on the horizon and government negotiations were still heading nowhere, they finally pulled the plug on the transaction.

All this institutional pressure led to the NVIDIA-Arm deal’s collapse. But why were competitors and governments concerned in the first place?

A Conflict of Interest

qualcomm processor

With the Arm purchase, NVIDIA aimed to take advantage of Arm’s ecosystem and combine it with their AI computing technology. NVIDIA envisioned expanding and using Arm’s facilities in the UK for AI research into healthcare, life sciences, robotics, self-driving cars, and more.

Since NVIDIA is also in the computing space, they would have used Arm’s processor design to create a CPU/GPU combo to rival Intel and AMD offerings. After all, if AMD has Ryzen and Radeon, and Intel has the i-Series and Arc, it would make sense for the number one discrete GPU maker to offer a processor.

However, Arm is also the sole designer and licensor of the ARM chip architecture. This chip design practically powers all smartphones globally and is making in-roads in the PC market, garnering an 8% market share in 2021. If the NVIDIA-Arm deal was pushed through, NVIDIA’s competitors feared that this would have led to anti-competitive conduct.

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