Arm Predicts Stagnation if Nvidia Deal Fails

By Nitin Dahad, EETimes (January 18, 2022)

Arm faces significant hurdles to growth as a standalone company if Nvidia’s proposed acquisition falls through, according to documents released as part of the U.K. regulator’s ongoing merger inquiry.

The 29-page document details the joint Arm-Nvidia response to the U.K. government’s decision last November to refer the deal for further investigation to the U.K.’s Competition & Markets Authority (CMA). The response emphasizes that without investment from Nvidia, Arm would be seriously disadvantaged in its bid to grow in data center markets and compete against Intel Corp. and x86 incumbents. The filing also explains why an Arm stock offering is a non-starter while noting that Arm faces stiff competition from emerging RISC-V competitors.

With SoftBank’s investment nearing an end, Arm finds itself at a crossroads, making its acquisition by Nvidia a “unique, once-in-a-generation opportunity to expand and enhance Arm’s ecosystem, benefitting the U.K. and all Arm licensees,” the filing asserts.

In dismissing the IPO option, Arm said a stock offering would suffocate its ability to invest, expand and innovate, noting that capital markets demand a focus on short-term revenue growth and profitability.

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