For Arm, the profit margins simply aren't there unless you're putting your CPUs in everything, or building highly specialised CPUs for highly specialised niches. The latter is where NVIDIA has, rightly, focused their attention by augmenting their primary area of expertise (graphics) with CPUs that can help feed those graphics. They don't want to be a CPU company because CPUs are ancillary to their core focus.
Which once again brings us back to their attempted acquisition of Arm; I still struggle to see the reasoning behind it. The argument that it was to integrate NVIDIA graphics into Arm CPUs doesn't wash because NVIDIA's focus has always been high-performance high-power graphics, not low-end low-power ones as found in typical Arm applications, so they would essentially have to build an entirely new product. The thing is though, that doesn't require them to buy Arm; if NVIDIA already has a low-power GPU capable of competing with what's typically found in smartphones, there's absolutely nothing stopping them from just licensing or selling it as a standalone product.
The cynical take is that it's simply so NVIDIA could increase Arm licensing fees and reap the profits, but I really don't see that panning out well for them; it would almost certainly have pushed a lot of Arm licensees towards the royalty-free RISC-V, which makes it a self-defeating proposition.
