Oluwapelumi is a believer in the transformative power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas. When he is not writing, he is looking to meet new people and trying out new things.
While rivals had many things to say about the acquisition, including its threat to job security in the UK and the tech sovereignty that would eliminate competition, there was a bigger gripe in play.
The Arm acquisition, which was on course to birth the world’s premier computing company for the AI era, ended in epic failure in light of the unfortunate turn of events.
Arm is a chip designing company whose main office is located in Cambridge, UK and had been autonomous until 2016 when it was purchased for $32 billion by SoftBank. Arm boasts of an energy-efficient chip design that has managed to attract up to 95% of smartphone developers globally.
With the current outcome, some analysts had opined that the deal was destined for failure from the onset. This is because rivaling regulators across the United States, UK, Europe and China had been looking into the deal.
Nvidia Corp and Arm made numerous attempts at securing the approval, citing their intention to make huge investments in the chip company while allowing other companies to use its designs. Their appeals however landed on deaf ears.
As reported on CNBC, Nvidia officially scrapped the deal on February 8 which led to an outpour of reactions from commentators in the space.
Reactions Trails Nvidia Announcement
The Popular sentiment was that Arm remains independent as its technology is very important to the AI space. Russ Shaw explained how the chip shortage crisis has affected every industry across the globe. The Tech London Advocates lobbying group founder supports that Arm is one of the companies that can contribute to UK attaining a sustainable market position in the realm of technology globally.
According to CSS Insight CEO, Geoff Blaber, the Arm Nvidia-Softbank deal has been on the receiving end of extensive scrutiny and pressure from the beginning, which is why the failure was somewhat expected. Per the executive, the most challenging task throughout this deal was to achieve such a balance where regulators were appeased and still maintain the value of the deal.
Hermann Hauser, a serial entrepreneur famous for his contributions in developing the pioneering Arm processor, was of the opinion that the deal would be detrimental to human interest, citing the loss of jobs in the UK as well as the absence of competition.
Why the Deal Failed
While rivals had many things to say about the acquisition, including its threat to job security in the UK and the tech sovereignty that would eliminate competition, there was a bigger gripe in play. The main grievance about the deal centers on accessibility to the innovative chip designs of the British Chip Designer company (Arm).
According to CNBC, Arm licenses its design to many companies worldwide, such as vehicle manufacturers. More precisely, we have companies like Apple, who integrate the architecture in their iPhones and iPads, and Amazon, who have installed them in Kindles.
With the acquisition, Nvidia Corp would be mandated to prevent other companies from integrating Arm’s chip designs as part of their semiconductors, an action which according to analysts would have severe repercussions.