Nvidia today announced that they're going to buy ARM for $40 billion.https://www.anandtech.com/show/16080/nvidia-to-acquire-arm-for-40-billion
The deal makes sense for Nvidia, and it makes sense for ARM. The only problem is what happens to the rest of the tech industry. If no regulators block the merger, then it will be hard to understand why they review mergers at all.
ARM's business is licensing IP. They design CPU cores and GPUs, and they get them working on advanced process nodes. If you want to use ARM's CPUs or GPUs in your own designs, all you have to do is license the IP. They're very good at this, which is why ARM CPUs have come to dominate the industry.
Nvidia's business isn't licensing IP. Rather, their business is in designing chips and getting them fabricated. Enormous, expensive, and very high performance chips. Mainly Nvidia does GPUs, but they're working on getting into other markets, too.
There's no intrinsic reason why Nvidia can't license IP. They've tried to license their GPUs in the past, the way ARM, Imagination, and AMD do, but without any success. The problem is that Nvidia has a thoroughly deserved reputation for being an awful business partner who will squeeze you for more money whenever they see an opportunity. They've burned a whole lot of bridges this way.
Microsoft and Sony have each used an Nvidia GPU for a console generation exactly once. And been burned by it, learned their lesson, and never licensed a GPU from Nvidia again. They have no problem with licensing GPUs from ATI/AMD, and have each done so several times.
Nintendo learned from their competitors' mistakes, and when they went with Nvidia for the Switch, they didn't pay Nvidia for a custom chip. Rather, they used a completely off the shelf Tegra X1 chip that Nvidia had already designed. Microsoft and Sony have AMD customize all sorts of stuff for them in their Xbox and PlayStation chips. Nvidia would have done the same if asked, but Nintendo knew better than to ask.
Nvidia has also burned bridges with Apple. They used to use Nvidia GPUs sometimes and AMD GPUs sometimes in their Mac products. Then Nvidia sold Apple a bunch of defective chips, and Apple has been exclusively AMD for discrete GPUs for several years.
It's not that AMD had better GPUs than Nvidia the last several years. Much of the time, they had significantly worse GPUs. But Microsoft, Sony, and Apple all knew that if they license something from AMD, then AMD will play nicely. If they try to use an Nvidia GPU, Nvidia won't play nicely. So the only choices are AMD and Intel, at least if Intel can eventually make a good GPU.
And that's to say nothing of the many cell phone vendors that Nvidia has burned bridges with. Nvidia made promises about what their Tegra chips would do, cell phone vendors designed phones to use the Nvidia chips, and then the chips showed up burning massively more power than promised. Nvidia announced dozens of design wins to get Tegra into cell phones, none of which ever made it to market.
So for much of the tech industry, Nvidia owning ARM is definitely a nightmare scenario. That gives Nvidia the ability to cripple your products whenever they feel like it. Nvidia doesn't build products in most of the markets where ARM cores are used, but they could readily change that. If they control the CPUs that all of their competitors use, then Nvidia would have the ability to take over selected markets whenever they get around to it.
And the rest of the tech industry knows it. If the acquisition goes through, expect a stampede away from ARM. You know how Apple announced that they're moving Macs from x86 to ARM? Not going to happen if ARM is owned by Nvidia. You'd better believe that Apple is already trying to figure out what else they can move their CPUs to--including moving iOS devices away from ARM.
So why would Nvidia pay $40 billion to buy ARM and run it into the ground? Don't think of it that way. Think of it as paying $40 billion for the ability to massively disrupt all of your competitors in markets that you'd like to enter, at a time and in a manner of your choosing.
So what happens if the deal doesn't go through? Well, that works out very badly for ARM, too. You think you've sold the business to Nvidia, and the rest of the tech industry spends a year trying to figure out how to get away from using your products, and then you don't end up getting the money from Nvidia. That doesn't necessarily bring you back to the status quo, as when all of your customers have just spent a year desperately trying to figure out how they can stop buying anything from you, some of them might have succeeded. Plans put in place to replace ARM by something else might yet be executed. That might not be an unrecoverable event for ARM, but sure doesn't seem likely to work out well for them.
So basically, if Nvidia buys ARM, then ARM is dead, at least beyond whatever proprietary uses Nvidia gets out of using ARM cores in products that they design themselves. If Nvidia doesn't buy ARM, then ARM is still in serious trouble. Because this has about as much chance of working out well for ARM's customers as the acquisition by AOL did for Netscape users.