FTC Sues to Block $40 Billion Semiconductor NVIDIA and Arm Chip Merger

[watzupken]

and NVIDIA stock didn't move down a bit today

I think people have kind of factor in the potential of the ARM acquisition failure. But given how strong Nvidia's revenue and profit have been over the years, there is little point for concern. Until it is concluded that the acquisition will not go through, it is unlikely to see share prices dropping. In fact, even if there is a drop, it is just going to be temporary.

 

[Easy Rhino]

Honestly this all makes Apple look even more brilliant for creating their own silicon.

 

[enzolt]

Honestly this all makes Apple look even more brilliant for creating their own silicon.

Why? ARM acquisition is for royalties and licenses to produce ARM processors, Apple being one of its licensees...

Apple is a control freak and they would rather make their own chips. That doesnt have anything to do with Nvidia buying ARM.

 

[mtcn77]

9.5bln is pocket change to Softbank though, their AUM is north of 150bln:

Which is why I contest companies should not be permitted to operate if they are losing value until they gain the same amount of value.
Weworks was defrauding the industry by valuing itself above the ranks of 'functioning' companies. Would you consider it to be valued higher than SpaceX? But it happened and investor money got ponzied.
Look, Arm doesn't need to be in the hand of a company losing 10B is all I'm saying. That is bad management and this looks like a corporate laundering scheme.
You might say "but Nvidia isn't involved", but that is after the fact of Softbank promising to do 'what is good for the company'. This isn't it...

Apple is a control freak and they would rather make their own chips.

One thing I like about them, no lag.

 

[Nephilim666]

Good

Literally what I thought of commenting, glad I came here and it's the first comment.

 

[Valantar]

Which is why I contest companies should not be permitted to operate if they are losing value until they gain the same amount of value.

If they aren't allowed to operate, how are they supposed to gain anything back? That sentence does not make any type of logical sense.

Weworks was defrauding the industry by valuing itself above the ranks of 'functioning' companies. Would you consider it to be valued higher than SpaceX? But it happened and investor money got ponzied.

That is an argument for regulating financial markets, as well as an apt illustration of the deep-seated irrationality and stupidity of the investor class (as well as increasing accountability for executives and the like). But to change that, you need to change the laws and regulations that frame their operations, not make vague hand-wavy "you can't do that" gestures. And as long as international finance is essentially deregulated and the biggest national actors show little to no interest in changing this, there isn't much to be done. This is a rare, rare example of these mechanisms (seemingly) working, but I wouldn't trust that to repeat itself without significant legislative action. These regulatory systems have been systematically undermined, defunded and made increasingly powerless over the past four to five decades, and changing that is going to take a lot of time and effort.

 

[mtcn77]

If they aren't allowed to operate, how are they supposed to gain anything back? That sentence does not make any type of logical sense.

They would just be barred from making venture capital moves until they correct their capital loss by raising the capital themselves. You seriously don't think companies only rise on the backs of others right? Some of these do generate real value, instead of bubble valuations. What I say may seem outrageous, but this prevents a industry deficit from bad investments if companies cover their own opportunity costs, not their assets.
This should prevent them from liquidating companies as assets that they shouldn't possess in the first place. Again, this is not about Nvidia, it is about Arm falling into the hands of a competitor by virtue of a company which shouldn't have it in the first place.

 

[Valantar]

They would just be barred from making venture capital moves until they correct their capital loss by raising the capital themselves. You seriously don't think companies only rise on the backs of others right? Some of these do generate real value, instead of bubble valuations. What I say may seem outrageous, but this prevents a industry deficit from bad investments if companies cover their own opportunity costs, not their assets.

I don't know, IMO the financial "industry" is more of a work of collectively generated fiction than anything capable of generating value. Which is reflected in how the vast majority of money shuffled around by these people and companies has no claim to reality other than agreement that it exists, and had mostly come into existence through banks deciding that it exists (aka. credit). That investments from this supposed "industry" somewhat enables actual industry is more of a tangential effect than anything else - if the crypto boom has shown us anything, it is that investors would prefer everything to be virtual if possible, as that avoids the whole mess of their decisions affecting the world, and they can instead just keep collectively inventing wealth. (Of course crypto does massively affect the world through its means of production, but they really, really don't want to think about that.)

In light of that though, it makes little sense for them to be barred from venture capital operations - after all, at that point you're putting the onus on the real industries to regenerate fictional, virtual wealth that has been lost, which is an unfair pressure to put on them (and seems equally if not more likely to trigger predatory practices from Softbank than anything else).

This should prevent them from liquidating companies as assets that they shouldn't possess in the first place. Again, this is not about Nvidia, it is about Arm falling into the hands of a competitor by virtue of a company which shouldn't have it in the first place.

I agree that Nvidia has no place owning ARM, but I don't really have an opinion on whether Softbank has/did or not.

Given that the vast, vast majority of the research underpinning ARM - as with all technology companies - is based on publicly funded research, I think it would be reasonable for there to be some form of reciprocity there. I'm not saying ARM ought to be government owned (which government(s)? In what form? That's not an answerable question), but this is just another example of the rampant exploitation for profit of public resources. One option would be for ARM to be self-owned, ideally as some form of not-for-profit foundation (with revenue from architecture licencing being fed back into R&D and other programmes benefiting the global public). Given that the ARM architectures are a fundamental and crucial form of infrastructure across the globe currently and for the foreseeable future, leaving it in the hands of fundamentally irrational and self-interested investors (including any single for-profit entity) is a really, really bad idea.

Edit: damn autocorrect

 

[mtcn77]

if the crypto boom has shown us anything, it is that investors would prefer everything to be virtual if possible, as that avoids the whole mess of their decisions affecting the world

Except, crypto is invented to hide inflation when you can artificially generate a scarcity.

at that point you're putting the onus on the real industries to regenerate fictional, virtual wealth that has been lost, which is an unfair pressure to put on them

You are twisting the meaning. That is what I call venture capital a.k.a. stock options. I'm talking about sales, not booms without industry. That is how you get theranos, wework 2.0. You don't really correlate with my points when replying.

Also, parent companies and their subsidiaries operate separately in this model. Parent companies cannot jeopardise subsidiary assets if they cannot make up for the lost value.
I said parent company generates hard value, not the onus is on the subsidiary to generate fictional value for them. It is not the intended meaning.

 

[R0H1T]

They blew as much money on weworks as theranos.

A lot more than Theranos. Wework is like the kryptonite that no Softbank (group) company should've ever touched.

 

[mtcn77]

A lot more than Theranos. Wework is like the kryptonite that no Softbank (group) company should've ever touched.

That is what I'm saying. They have to cover that on their own. Arm is not collateral, I mean the CEO promised to do what is good for the company. Are we in such a dystopian world?

How about I promise what is good for Nvidia and become CEO to sell the company piecemeal?

I'm not saying Nvidia shouldn't buy Arm, I'm saying Softbank should have 0 vote on who buys in the auction.

 

[R0H1T]

Hey I'm fine with whatever you do to Nvidia, just get this crypto fad scam to crash & burn so that GPU's can come back to reasonable levels

 

[Anymal]

Its all over, ladies and gentlemen.

 

[Fourstaff]

Which is why I contest companies should not be permitted to operate if they are losing value until they gain the same amount of value.
Weworks was defrauding the industry by valuing itself above the ranks of 'functioning' companies. Would you consider it to be valued higher than SpaceX? But it happened and investor money got ponzied.
Look, Arm doesn't need to be in the hand of a company losing 10B is all I'm saying. That is bad management and this looks like a corporate laundering scheme.
You might say "but Nvidia isn't involved", but that is after the fact of Softbank promising to do 'what is good for the company'. This isn't it...

Company value is something we (as in, all collective market participants) assign. If it goes up, we have assigned a higher value. If it goes down, we have assigned it at a lower value. Of course, there are a lot of other people on the sidelines not actively trading, these people don't get to assign a value to the company. For example, if I am not bidding in pokemon trading cards, I don't get to assign what value Shiny Charizard is worth. But I can certainly say "This is absurdly priced, its just a piece of paper!", which is what we are doing now. As a side note Microsoft lost 3.5 bln since the start of the month. 10 bln is something MSFT will gain/lose in a typical week.

You can argue Wework is defrauding someone (or many people). They sold a dream, and people assigned a value to it. Its just so happens that this dream is a fraud, so people are rightfully angry about it. Whatever value they thought it is worth is now wrong.

If you think ARM doesn't need to be in the hand of a company losing 10 bln (or anyone's hand), please raise enough capital to bid and take it off their hands. If not, then be mentally prepared for other people to make decisions for you. Stock market is not a democracy, winners get to call the shots.

 

[Valantar]

Except, crypto is invented to hide inflation when you can artificially generate a scarcity.

Nah, crypto was invented to be yet another tradeable commodity, just one that is removed from the pesky limitations of material existence and can be (like capital) brought into "existence" at will (while having a sufficiently buzzwordy origin story for tech fetishists to evangelize it as if it has actual value). But ultimately, it's just another thing for rich people to gamble on.

You are twisting the meaning. That is what I call venture capital a.k.a. stock options. I'm talking about sales, not booms without industry. That is how you get theranos, wework 2.0. You don't really correlate with my points when replying.

I still don't see how barring Softbank from selling the companies they own will somehow force them to gain back those losses in any way though. I mean, they are a holding company at their core. Their only "product" is "owning stuff". Their only revenue is payouts from their properties.

Also, parent companies and their subsidiaries operate separately in this model. Parent companies cannot jeopardise subsidiary assets if they cannot make up for the lost value.
I said parent company generates hard value, not the onus is on the subsidiary to generate fictional value for them. It is not the intended meaning.

But for a parent company whose only function is owning (parts of or whole) other companies and properties, there is literally no way for them to generate such value. So you've just created a catch-22 situation, which definitely won't protect ARM.

 

[Aquinus]

and NVIDIA stock didn't move down a bit today

Yet over the past 5 days, SoftBank has gone down about 11%.

SoftBank Poised to Lose $74 Billion Payday If Arm Deal Is Halted

With SoftBank Group Corp.’s sale of Arm Ltd. to Nvidia Corp. in severe jeopardy, the company faces the prospect of losing a jackpot of roughly $74 billion. And its consolation prize is uncertain.

www.bloomberg.com

 

[W1zzard]

Yet over the past 5 days, SoftBank has gone down about 11%.

SoftBank Poised to Lose $74 Billion Payday If Arm Deal Is Halted

With SoftBank Group Corp.’s sale of Arm Ltd. to Nvidia Corp. in severe jeopardy, the company faces the prospect of losing a jackpot of roughly $74 billion. And its consolation prize is uncertain.

www.bloomberg.com

hmmm .. pe ratio around 4, looks good and 1% dividend too .. maybe wait with buying for the drop after the merger is cancelled .. or get in now ..

 

[R0H1T]

Yet over the past 5 days, SoftBank has gone down about 11%.

SoftBank Poised to Lose $74 Billion Payday If Arm Deal Is Halted

With SoftBank Group Corp.’s sale of Arm Ltd. to Nvidia Corp. in severe jeopardy, the company faces the prospect of losing a jackpot of roughly $74 billion. And its consolation prize is uncertain.

www.bloomberg.com

They gain a lot more if they increase the per (core) license cost for ARM, especially in case of servers. Softbank is literally sitting on a goldmine, if they hadn't blown money on Wework they wouldn't have to do this!

 

[RoutedScripter]

Lovely, best news!

Yet over the past 5 days, SoftBank has gone down about 11%.

SoftBank Poised to Lose $74 Billion Payday If Arm Deal Is Halted

With SoftBank Group Corp.’s sale of Arm Ltd. to Nvidia Corp. in severe jeopardy, the company faces the prospect of losing a jackpot of roughly $74 billion. And its consolation prize is uncertain.

www.bloomberg.com

This "value" of things on stockmarket can be incredibly deceptive, everything that's negative is always regarded/reported as "lost", did they even deserve to "gain" the stuff they "lost", did they even got it at all, stock market value is just what someone else thinks of what they're worth, it's a dream, a thing that does not exist, but magically real money, physical action can be pulled out of it which is the most ridicolous thing ever, so basically what the world relies on the most are not physical things such as food, water, resources, materials, space, but some virtual nonsense that gives things "worth", and this virtual nonsense that happens in random investor's minds and other players is such a ridicolous concept. This virtual thoughts of "worth", the way it depends on irresponsible-joke-like personal feelings and psychological phenomena that can be so easily manipulated and so easily influenced by so many invalid factors, but also on personal greed, could be compared to an analogy of how many beans did a random investor fart the other day, is what they're going to think something is "worth", it is just so ridicolous, it's astonishing.

The stock market is one giant casino where real lives are at stake, why is this system legal, the epitome of unfairness, how can anyone with even an inch of intelligence in their mind who is supposably this "modern democractic free man" that has fought off the old slaveries of kings, crowns, dynasties, thiefdoms, monarchs, tsars, and dictators agree with such a moronic system. The answer is that probably most people have no idea what they're living in. Something as stupid as this shows a high probability it must have been done in bad faith, the people who thought they defeated the old slaveries probably got deceived, the slavery just continues in a more sophisticated way, and the way it works is hidden by added unnecessary complexity of the monetary system.

Do we really believe that we the actual people who use and have to live in this system's daily struggles, we designed and developed such a dumb system to later impose it on ourselfs? Or did we get screwd over by voting something in. You all know the answer, everyone knows in their own mind how many times did he/she read the full ~1000 page budget laws most countries have to pass each year, all the treaties, everyone knows almost nobody reads that, even the puppet politicians. There you go.

 

[enzolt]

If this deal happens, RISC-V adoption will increase.
NVIDIA is licensing whore. These guys charge for every single service.
They will probably raise the price for ARM licensing. If/once that happens, RISC-V is a winner.

 

[windwhirl]

Theranos took 15 years to be dissolved. Your point? The question is, who can operate in direct contradiction with the industry. You cannot liquidate other people's assets. That is what weworks was and I don't think any company saving that has anything further to say about why arm is getting thrown under the bus.
Who is blaming arm as insolvent and liable to take over because its parent company flushed all its liquidity down the drain to keep doors open in a failed business?
It is only lust and greed that you are trying to defend. Softbank doesn't own Arm just as theranos is a corporate fraud.

It's obvious we'll just descend into constant and pointless bickering about it if we continue, so I guess we'll have to agree to disagree.

So ARM can only be sold to another bank?

every compagnie now make their “own” chip

Also Waiting the response of softbank if They still want to try to sold ARM again

Now the question becomes, is their a buyer out their that has the capability to turn ARM into a profitable enterprise. While avoiding the same FTC anti competitive issue?

Well, there aren't many people and companies in the world that can move 40 billion dollars "on a whim" to acquire ARM. I don't think any tech company could/would try to acquire it due to all the issues that this deal already brought up, for starters. So that leaves mostly the biggest investor groups on the table. And even then, who knows if it wouldn't be blocked again on the grounds of "you already have a lot of stock in this other tech company, so we'll block it just in case"

If this deal happens, RISC-V adoption will increase.
NVIDIA is licensing whore. These guys charge for every single service.
They will probably raise the price for ARM licensing. If/once that happens, RISC-V is a winner.

As it is, I think the deal is dead in the water (and quite frankly, I like it this way). Plus RISC-V is kinda new still, not entirely sure it would measure up for a long time yet.

Besides, do you think the markets will just automatically switch to RISC-V if Nvidia won the deal and did what you said? Seems unlikely, there's a lot of stuff to change every freaking where, it can't be done in a snap. We're talking like half a decade to have the market change from ARM to RISC-V in any significant proportion, in the best case scenario. Otherwise, think at least +10 years.

 

[enzolt]

It's obvious we'll just descend into constant and pointless bickering about it if we continue, so I guess we'll have to agree to disagree.




Well, there aren't many people and companies in the world that can move 40 billion dollars "on a whim" to acquire ARM. I don't think any tech company could/would try to acquire it due to all the issues that this deal already brought up, for starters. So that leaves mostly the biggest investor groups on the table. And even then, who knows if it wouldn't be blocked again on the grounds of "you already have a lot of stock in this other tech company, so we'll block it just in case"


As it is, I think the deal is dead in the water (and quite frankly, I like it this way). Plus RISC-V is kinda new still, not entirely sure it would measure up for a long time yet.

Besides, do you think the markets will just automatically switch to RISC-V if Nvidia won the deal and did what you said? Seems unlikely, there's a lot of stuff to change every freaking where, it can't be done in a snap. We're talking like half a decade to have the market change from ARM to RISC-V in any significant proportion, in the best case scenario. Otherwise, think at least +10 years.

It wouldnt be overnight yes but it will definitely happen. Changes like that take time.

 

[stimpy88]

Why? nGreedia is such a nice company...

 

[mtcn77]

As a side note Microsoft lost 3.5 bln since the start of the month.

Microsoft did not do it to save a company at the behest of another. That is what I'm at odds. Losing money is okay, losing money for no reason and trying to justify by selling another should trigger some flags.

It's obvious we'll just descend into constant and pointless bickering about it if we continue, so I guess we'll have to agree to disagree.

Just pointing out some due process before accepting a deal.

I still don't see how barring Softbank from selling the companies they own will somehow force them to gain back those losses in any way though. I mean, they are a holding company at their core. Their only "product" is "owning stuff". Their only revenue is payouts from their properties.

It will force them to generate value and not play zero sum games. The industry is not rolling on a dime to see which way points up. Companies have to risk in order to profit and not lose. If they do, they need time off to play some more venture capital business. You have other ideas to stop shorts on the industry?

 

[Valantar]

It will force them to generate value and not play zero sum games.

Nonsense. They are a holding company. Their "product" is owning property. For them to then generate profits in some other way - especially in the order of billions of dollars - would require massive investments in starting some new business of some sort (which, well, good luck starting a business able to make $10bn in profits in a short time, no matter your wealth), or buying/investing in some other company, which they would be barred from doing. While your argument seems somewhat plausible on paper, it would be an effective ban on them operating as a business at all, which would only cause further losses.

The industry is not rolling on a dime to see which way points up. Companies have to risk in order to profit and not lose. If they do, they need time off to play some more venture capital business. You have other ideas to stop shorts on the industry?

Beyond strict regulation of investment banking as a whole? No, but then nothing less than that will have any effect. And it is deeply, deeply necessary for this to happen.