SUBSCRIBE

CATEGORIES

Arm CEO says Nvidia merger better than going public

imageStock Markets4 minutes ago (Jul 02, 2021 03:47PM ET)

(C) Reuters. FILE PHOTO: The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017. REUTERS/Tyrone Siu/File Photo

By Stephen Nellis

(Reuters) – Nvidia (NASDAQ:NVDA) Corp’s proposed $40 billion acquisition of Arm Ltd would better support the creation of UK technology jobs than the SoftBank Group Corp unit becoming a standalone public company once again, Arm’s chief executive said on Friday.

“We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast and innovate,” Arm CEO Simon Segars wrote in a blog post https://www.arm.com/blogs/blueprint/arm-nvidia.

“Combining with Nvidia will give us the scale, resources and agility needed to maximize the opportunities ahead,” Segars wrote.

Last week, Qualcomm (NASDAQ:QCOM) CEO Cristiano Amon told The Telegraph newspaper https://www.telegraph.co.uk/technology/2021/06/13/qualcomm-ready-invest-arm-40bn-nvidia-sales-collapses and other media outlets that Qualcomm was open to investing in an initial public offering by Arm if the Nvidia deal falls apart. Amon has told media outlets that joint ownership of Arm by industry peers would keep the firm independent.

Qualcomm did not immediately respond to a request for comment.

Nvidia last year announced its plan to acquire Cambridge, England-based Arm, long a neutral supplier of chip design technology, from the Japanese conglomerate, which does not own any other chip companies.

Critics like Qualcomm Inc have argued that allowing Arm to be owned by one chip company could cause it to focus on technologies that benefit its owner rather than the broader industry.

The deal is under regulatory scrutiny in the United States, United Kingdom and European Union.

SoftBank bought Arm for $32 billion in 2016, betting on a surge in what are called internet-of-things (IoT) chips. Arm invested heavily in hiring to purse the technology. But the IoT market failed to produce a revenue boom for Arm, and the company later raised prices https://www.reuters.com/article/us-softbank-group-arm-exclusive/exclusive-arm-raises-prices-on-chip-technology-for-some-customers-sources-say-idUSKCN24G1RM for some of its technologies, angering some customers.

Arm CEO says Nvidia merger better than going public

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.