Nvidia to acquire Arm for $40bn, promises to keep its licensing business alive Nvidia has announced it will buy UK chip-designer Arm. A Monday statement from Nvidia and Arm’s current owner SoftBank says the transaction will be valued at $40bn. Nvidia is not buying Arm's Internet-of-Things services, we note. Arm will remain headquartered in the UK and its brand and business model will persist. Arm, which …
I didn't like the original Softbank deal, but selling the company to nVidia - which directly competes with some of ARM's customers and is a US firm subject to the whims of the current administration - has the potential to be so much worse. ..... Martin an gof
Especially so if ever it be discovered a RAT trap ..... and Profitable Pirateable Proprietary Intellectual Property Magnet ....... for Private Magnate Centres of Stealthy Excellence. ..... Future Ideas Factories.
All ursecrets now belong to us ?????
Although of course they really don't, for the original secrets holders will only tolerate for a limited period of time such as they would consider as sub-prime second and third party use and/or abuse and misuse.
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That's a radical statement. Care to elucidate?
They say that the licensing model will persist, and beside that, chip makers already have licenses, several of which are architecture licenses which allow them to extend the architecture, and are for perpetuity.
This means that Arm devices are here to stay, and in case you didn't notice, already have Linux ported to them.
As an example, look at Raspian running on a Pi-4. I could quite happily use that as a desktop system.
What may change is the cost of non-perpetual licenses. Some companies may find the cost of their license renewals increasing or becoming unavailable, but too much of the latter will kill the business.
I wonder if the Nvidia legal people have found a way (deep down in the small print) to revoke those perpetual licences? That really would stir things up.
Not so difficult to guess.
They'll slow down the evolution and let the design slowly fade into obsolescence
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Yes, I know that Nvidia have in the past been a bit of a problem with regard to their graphics processors, but that particular clip is from 2012. But some things have changed, and at least for some of their older GPU architectures they are providing some documentation, and do have half decent binary drivers now (their offerings used to be crap, and well ot of date).
But ARM is a completely different market. They have a high mark up on their GPUs, and need to protect their revenue stream. They cannot take the same model and apply it to ARM designs.
Firstly, they do not currently control the manufacture of the devices, and they only have the initial use license fee and a very small per-core license fee.
Secondly, there are already licensees who have the rights in perpetuity to take their existing designs and re-implement and modify them. This means that even if they decide to take future core designs private, that will not stop existing designs evolving. If they do this, they run the risk of fracturing the market, and as they need high volumes to be able to continue to get revenue on the low per-core license few.
Third, if they decide to limit or increase the cost of new licenses and license renewals, this will give the chip companies a reason to invest in other architectures like RISC-V and even MIPS (companies like themselves!)
Remember, the only thing that really makes ARM processors stand out is their low component count and power, licensing terms and ubiquity. The architecture has always been relatively simple, even with some of the newer designs. There is no reason at all to suppose that given the right impetus, other simple designs could not be produced. ARM have a head start, but there are a lot of people out there who could devote a lot of resources to try to catch up using already existing or new work. It's just that at the moment it's not worth it.
Nvidia will not want to take the technology private. It's not worth $40bn in cash and stock just to have another private design. The value is in volume and market penetration.
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The main reason ARM was spun off from Acorn Computers to become an independent company was that Apple (who wanted to use ARM in their Newton hand-held) did not want to be dependent on a competitor (however tiny). Having NVIDIA control ARM can lead to similar sentiments from ARM licensees that compete with NVIDIA.
I would prefer ARM to be neutral with no single instance (company or person) owning more than 20% of the company.
On the other hand, don't forget that one of the very first licences went to Intel (via DEC), who came up with the StrongARM processor (later XScale?) which was a huge step up in performance from the 600 and 700 series chips Acorn were then shipping in RiscPCs, and (I believe) also introduced the 32-bit addressing mode. My StongARM-containing RiscPC is still running...
Arguably it was the deal with DEC that started the whole licencing model that has done so well for ARM over the years.
But still, back then they were a very minor player in the grand scheme of things and hardly a threat to anyone. Nowadays the opposite is true and I'm not at all certain that nVidia has the best long-term interests of ARM at heart.
M.
I recently learnt that Malcolm Bird had an earlier business plan to spin ARM out before Apple got interested so the eventual timing of it was down to Newton but the main reason was Acorn not consuming enough ARM processors to recoup investment costs (and it was Robin Saxby's later plan they went with).
If in a year Arm still have their own brand and control their own finance, HR and legal I'll keep calling them British and a Cambridge company and Simon Segars can keep calling himself CEO!
Well yeah. It got off to a bad start when, less than a week after Theresa May assured us no more core technologies would be sold to foreign interests, ARM's sale to Softbank was approved. Which I think has pretty much sealed ARM's fate.
Just Cadbury's all over again, as others have mentioned.
Would you prefer random interventions in company ownership by Trump?
In case you hadn't noticed the British government didn't own ARM. So to stop it being sold at a huge mark-up was basically depriving its owners of their property. Had the government invested money in it and kept a "golden share", it would be a different thing.
"In case you hadn't noticed the British government didn't own ARM. So to stop it being sold at a huge mark-up was basically depriving its owners of their property."
The British government has in the past barred the sale of companies to overseas entities under the auspices of "national security" (they were mainly defence companies)
So what would the national security excuse be for ARM?
There are also roundabouts to the swings (thinking about it which one of those is supposed to be the bad one?)
Our economy does very well for foreign investment. Because we've maintained an open economy that doesn't arbitrarily stop people from either buying into companies or selling out to get their money back when they want to. Obviously if you block sales, then people are going to be less willing to risk their money in the first place - as they risk not being able to get it back when they need it.
We could obviously change this, but it wouldn't be without costs.
Our economy does very well for foreign investment.
Quite so ...
It is no secret to anyone that the UK (specifically London) is a global cesspool of dirty money where bankers offer financial services for worldwide money laundering and tax evasion while regulators look the other way as shell companies shell companies make billions.
Yes, the UK economy does well.
O.
Our economy does very well for foreign investment
I agree and so did Acorn - ARM as formed: 40% Acorn (themselves 60% Italian owned at the time), 40% Apple (US), 10% VLSI (US) and 10% various parties which even if we assume were all British that still only adds up to one UK money. Arm were global from the start.
Indeed ...
Shameful.
“Arm’s business model is brilliant. We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand Arm’s IP licensing portfolio with Nvidia’s world-leading GPU and AI technology.”
Save for Arm's model undoubtedly being brillant, I don't believe a word of this.
O.
“Arm’s business model is brilliant. We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand Arm’s IP licensing portfolio with Nvidia’s world-leading GPU and AI technology.”Save for Arm's model undoubtedly being brillant, I don't believe a word of this. ..... oiseau
The only money shot questions worth asking there, oiseau, is who/what is personified by the pronoun "We" and are they all powerful and/or omniscient, for surely only then can their word be capable and enabled of being believed.
Worse was the Tories trumpeting this as faith in Britain after Brexit....apparently giving away all your key industries is us taking back control!.... simpfeld
It does have one wondering on what sort of offers leading Cabinet officers are tempted with from other governments/allied business interest for them to be instrumental or wilfully deaf, dumb and blind to all such as would be right dodgy shenanigans resulting in a loss of home control.
Offers that they daren't refuse are a firm favourite with all sorts of gangster types.
It's a pity ARM was ever sold to anyone, but better that Nvidia has them than the Japanese Beancounters Softbank, who are clueless at tech and hardly more than speculators.
Though I can see why some ARM users would be unhappy. Still, better than the sell off of Inmos was.
But relistically, as ARM is going to be owned by someone, it's better a real tech company than a so called Fund Manager.
Unfortunately Philips is long gone as Electronics (Only lights and health care, semiconductors was spun off as NXP and sadly getting bought by Qualcomm who are almost just Patent Trolls). Who else other than Nvidia actually makes sense?
Texas Instruments, AMD, Intel, Qualcomm, Apple, Google, Samsung, LG would all be worse.
I am probably very naive but I have never understood this mania for buying each other in the technology industry.
The first time I was directly involved was when Oracle bought Sun and then ran it into the ground (just as we all expected). Why couldn't Sun just continue as they were. Why didn't ARM stay as an independent company?
>Why couldn't Sun just continue as they were.
Sun was pretty much dead once we could run free on Linux on cheap x64
A lot of Sun users ran Oracle. Oracle were afraid that a lot of IBM HW salesmen visiting ex-Sun customers might have a DB2 salesman in tow
>Why didn't ARM stay as an independent company?
Because an idiot with more money thane sense (judging from his other investments) offered the shareholders more than the current market price for it.
I'm really sad about Philips. It was my first proper job when I started out 30 years ago and I was just seeing the tail end of its "golden age" when it was a really innovative company and a nice employer too. But this was now the '90s, the age of VARs and "I expect everyone to be a salesman" as our new CEO announced. The demise of Philips Telecommunications and Data Systems (or Business Systems, or Information Systems, or whatever-it-was-called-this-week by that point) was very rapid but it seems that the new approach to big fat profits i.e. flogging anything that made money and rationalising expenses by firing staff at random was just the way of things from now on.
Its amazing how reports of 1.5 billion of nVidia stock being punted towards employees as part of the deal will bring people round - at least until the shares vest ... unless everyone switches into VIP ("vest in peace" (*)) mode and merely hangs around doing the minimal effort until pay day arrives.
Getting the ink dry on the deal before Election Day 2020 makes sense as corporate strategy. A Biden victory would mean a long cool look by various agencies at mergers of all kinds as budding monopolies. Prior to the first Obama term there were a flurry of mergers in several industries. Of course it could still go south, but carpe diem, etc.
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