With $40 billion in annual revenue and counting, NVIDIA is an industry behemoth that wields a considerable amount of power. The chipmaker is also one of the first companies to fully integrate mobile graphics into their CPU chips, and it seems like the company is looking to use that power to keep other companies in line. According to sources close to the matter, NVIDIA has already made a decision to pull out of its $30 billion ARM acquisition.
When NVIDIA bought ARM back in 2012, they set their sights on the future of the smartphone market.
They wanted to take on the mobile phone industry by producing more powerful chips that would be able to power the next generation of smartphones. But it seems that they underestimated the impact that the Chinese smartphone market would have on their plans.
The Chinese smartphone market has grown by leaps and bounds over the past several years. And thanks to the rapid growth of their smartphone industry, the amount of money that they spent on technology and hardware has exploded as well.
And now, NVIDIA has a new competitor in its sights. As they prepare to release their own version of the Tegra X1 chipset in just a few weeks, it appears that they are planning to walk away from their ARM acquisition.
Why Are They Walking Away?
It seems that NVIDIA’s Tegra X1 chipset will have a number of advantages over the Snapdragon 820 chipset that Qualcomm is currently offering in their flagship phones.
For starters, the Tegra X1 is going to use an 8-core GPU that should give it a significant performance advantage over Qualcomm’s 8-core GPU. And according to AnandTech, it will also offer an impressive battery life.
However, despite the obvious benefits of the Tegra X1, it looks like NVIDIA isn’t going to be able to capitalize on them. According to their plans, they are going to make their new chipset available to manufacturers in
And since it’s not even available yet, it looks like NVIDIA is going to walk away from the acquisition early. In fact, it’s even possible that they will just release the chip and then let the market figure out what will happen to their stock price.
What Happens Now?
While NVIDIA might be walking away from the deal, that doesn’t mean that ARM is going to have a monopoly on the smartphone industry. The Chinese market is still very important, and while they don’t have the same level of influence that Apple has in the US market, they do have a significant impact.
The Chinese have a strong desire for high-powered smartphones, and it appears that NVIDIA may have been hoping that it could build its own mobile computing platform by acquiring ARM.
But now that their plans are being thwarted by the Chinese market, NVIDIA will need to find another way to make their dreams of a “mobile computing platform” come true. And if they can’t, then the Tegra X1 will likely be a complete failure.
