What Tech Decoupling Really Looks Like: Nvidia Ignoring Chinese Veto of Arm Acquisition

Caixin: In Depth: China Plays Kingmaker in Nvidia’s $40 Billion Bid for Arm

Nvidia has said it expects the deal will take around 18 months to complete, with approval required by the U.K., European Union and U.S. in addition to China, the last of which currently accounts for about a quarter of Nvidia’s sales.

Many of the industry sources polled by Caixin said many China-based customers that rely on Arm’s technology are likely to balk at having the company come under control of an American peer. At the heart of their concerns is the different nature of Arm’s current relationship with owner Softbank and a potential future life under Nvidia.

Whereas SoftBank is largely a high-tech investor that lets Arm operate independently, Nvidia is a peer that would treat Arm more as a strategic purchase to complement its own products. Accordingly, most people interviewed by Caixin agreed that Arm would lose some of its autonomy if the deal is approved, becoming more like a traditional subsidiary of a larger company.

Losing 25 percent of sales would hurt Nvidia, but what percentage of its Chinese buyers have acceptable alternatives? I don't know the answer to that question. I do know that real tech decoupling would be evidenced by Nvidia ignoring a Chinese veto of its Arm deal.