So Ultimately, What Does it Mean for NVIDIA to Buy ARM??? Controversy.
In the last week, Nvidia saw its stock price finally pop over $600 a share for the first time. And then tumble again on bad news. It did so after hovering in the $500s in earnest since September 2020 when Nvidia announced a proposed deal to acquire chipmaker ARM. Coinciding with the much-anticipated breakout was breaking news and resultant controversy attacking Nvidia’s acquisition of ARM.
Ok, so what was the primary driver of this bad news you ask?
Qualcomm, Google and Microsoft Get Whiny
The big kids got but-hurt! As in, but I wanted to do that. Plain and simple. The announcement that these companies were filing complaints against the proposed merger immediately sent the stock back under $600, but not for long. Presumably under the auspices that the deal will go through anyway?!?!? Maybe.
Their argument though… anticompetitive practice.
Really, this is funny…
Yup, we’re talking serious irony and hypocrisy folks… Mostly because we’ve got this…
and this…
and oh yeah, lest we not forget this…
Do as I say, not as I do kinda thing. Go figure! You’d think they’d welcome another big player among their ranks to take the heat off of them. After all, more big players in broader tech space the more competition right? Therefore, less monopolistic action is possible right? If there are a bunch of big players and they are all maneuvering to control the technosphere where is the monopoly?
Jensen’s Rebuttal
Ok, before we get too far ahead of ourselves. We need to ask, what does Nvidia has to say about this? Did they see this coming. Oh, yeah, they did…
Correct me if I’m wrong, but I don’t ever recall any of their C-Suite level execs promising to keep things independent for their proposal/acquisition. Yup, that’s right Nvidia CEO Jensen Huang did just that…
As a demonstration of this, if you believe the Telegraph or even us, then Jensen is already making promises to keep jobs/offices in UK up and running to keep the independent lifeblood part of the Matrix…
This Could Never Happen, Right? There is No Precedent for Such a Thing, Right? Oh, Wait a Minute…
Would keeping a company separate and open-sourced make any sense… oh it could never happen… so we would only expect this to be rejected. Right? There is no precedent for this right? Maybe we should ask IBM; oh yeah, IBM just did that with the acquisition of another open-source tech (Red Hat) and you guessed it, that deal that said they would keep it separate was cleared by regulators too. Yeah, there are fineries sure, but hey both big tech, both open source, both finding homes in other giants.
And to say that the deal would be too big also misses the point because for another Tech behemoth like IBM (ok, so not a $200 Billion Market Cap – $106 Billion-ish on 2.17.21- but still pretty darn big), it didn’t stop them from making the largest add in their company’s history.
As For an Arm Acquisition Generally Speaking, Others Wanted it Too, Even Those Making Accusations Now!
The former CEO of Qualcomm Paul Jacobs said that his former company had thought of acquiring ARM, even Nvidia at one point, and didn’t proceed simply because the finances didn’t make sense at the time but not that they didn’t want to! And also presented evidence to say that if the deal goes through that there are still alternatives.
Where Do We Go From Here???
So where does this leave us… some say it’s “all but dead – it’s a classic example of geopolitics killing innovation.”
But this (see below) makes sense???
Its possible that its dead on arrival due to china.
But does that really make sense? Many questioned a previous acquisition (Mellanox) on the same grounds but that one went through…
Bottom Line its a crazy world we live in…
Where We are Today?
Just this past weekend, the actual probe got going….
And…
Oh, yeah, the price is back up! Today, 02.17.2021 the stock price is considerably back over $600… check it out. Go figure!
Shouldn’t be surprised though as the Nvidia love story continues…
Oh, yeah… and don’t forget about this!!!
This story just gets better by the minute!
Our Conclusion
We love the story. We love the madness. We don’t tell any one to do anything other than enjoy the ride! We just love sharing the intel. And if you missed any part of this three part experience, we suggest you go back and start with part one that focused on exploring what this proposed acquisition meant to Nvidia, and part two that focused on the deal from ARM’s perspective with a love story/Deadpool twist.
BCB Cyber is neither sponsored nor supported by any of the above. However, full disclosure we are long NVDA, as our love affair continues too. As for Google, Microsoft, and Qualcomm, we love you too, just compete harder and don’t worry about the competition. Just fight to be the best and the biggest for in the end we all win if we can all learn to truly profit from innovation!
And, we hope the deal goes through. We think this love story is one for the ages. After all, it is a controversial, if not forbidden – oh wait maybe – love.