NVIDIA buying ARM - bold move or potential disaster?

EE Times offers some commentary about the rumored bid from NVIDIA to acquire ARM. SoftBank bought ARM for $31 billion in 2016 and is reportedly weighing its options. First up, the site notes NVIDIA is currently trading at an all-time high valuation and notes that on one hand, such a major, market-defining acquisition makes sense.

However, the site also points out that it's a very tricky deal. Gaining regulatory approval could be a multi-year nightmare and the acquisition could draw a lot of attention from competitors to NVIDIA. While NVIDIA does has $15.5 billion in cash, an acquisition would saddle it with a large debt and the benefits aren't immediately clear.

Other analysts write such a deal could be a disaster. Various analysts have a though time coming up with a positive narrative for the deal and point out that it would put NVIDIA directly in the middle of the fight between the US government and Chinese ARM licensees like Huawei. Furthermore, the potential acquisition could upset some of the many ARM licensees as it brings uncertainty to the ARM ecosystem.

In looking at the potential downside, Mike Demler, senior analyst at The Linley Group, said “key people might defect. More Arm customers might look to RISC-V,” referring to an open standard instruction set architecture based on RISC principles. Our colleague Bolaji Ojo called Nvidia-Arm move “reckless.” Kevin Krewell, principal analyst at Tirias Research, in our interview, called it “the most audacious move by Jensen Huang as CEO of Nvidia.”

It will be interesting to see what happens to ARM. Perhaps a big company like NVIDIA will try to buy it. The other option is an acquisition by a consortium or big and small tech firms. Lastly, it's also possible that nothing will happen and that SoftBank will remain ARM's owner, or that only a small stake in ARM will be sold.