>ARM designs some pretty good CPU cores, so imagine they offered good RISC-V cores as well.

This is the approach MIPS took. They deprecated their legacy ISA, embracing the industry-standard RISC-V.

Problem is, ARM's management hasn't shown any signs of actually being capable of doing this. It would have to be replaced, and the business model would need a deep redesign.

But everything hardware takes a long time. Can ARM survive until they have competitive RISC-V designs ready?

I will not bet on that.