Reply to post: Re: Funny..

US trade watchdog opposes Nvidia's Arm buy, mostly over fears about datacentre innovation

Anonymous Coward
Anonymous Coward

Re: Funny..

Exactly, and Apple too. Reading "Nvidia's $40B deal for Arm could affect Apple" [Compterworld]. One reason is possible increases in license fees on existing products -

[Jack] Gold [an analyst] also pondered the financial implications of Nvidia's purchase. "Do they want a heavy-duty payback?" he asked during the interview, referring to possible higher licensing fees. That, too, could put licensees like Apple in an unexpected spot.

Unfortunately, I do not believe that the long term future of Arm is necessarily safe even if the Nvidia merger does not go through. Once the internal decision was made to sell out for a profit (to Softbank in 2016 for 23 billion) the pressure is on for whichever investor owns it to turn an near term profit.

If Softbank needs cash (which they do) what will they do next? Sell it in parts? I could easily see a hedge fund purchasing some part - figuring out that maximizing short term income means jacking up fees for existing licenses while downgrading staff and investment until new sales drop and then selling of their part to NVidia, or even Arm China.

It's easy to say "don't do this merger" (and I agree with that), it is harder to find an owner who has the patience and resources to ensure the necessary continuing investment in R&D and a long term approach to sales. There WERE some owners who could do and did do that, but they already sold out for a big one time paycheck. Softbank has been a good enough steward since then, but now they are desperate for cash after a lot of other not so good investments went bad.

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