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Nvidia is reportedly in ‘advanced talks’ to buy ARM for more than $32B

1106 points| caution | 5 years ago |bloomberg.com

674 comments

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[+] DCKing|5 years ago|reply
This is quite concerning honestly. I don't mind ARM being acquired, and I don't mind Nvidia acquiring things. But I'm concerned about this combination.

Nvidia is a pretty hostile company to others in the market. They have a track record of vigorously pushing their market dominance and their own way of doing things. They view making custom designs as beneath them. Their custom console GPU designs - in the original Xbox, in the Playstation 3 - were considered a failure because of terrible cooporation with Nvidia [0]. Apple is probably more demanding than other PC builders and have completely fallen out with them. Nvidia has famously failed to cooporate with the Linux community on the standardized graphics stack supported by Intel and AMD and keeps pushing propietary stuff. There are more examples.

It's hard to not make "hostile" too much of a value judgement. Nvidia has been an extremely successful company because of it too. It's alright if it's not in their corporate culture to work well with others. Clearly it's working, and Nvidia for all their faults is still innovating.

But this culture won't fly well if your core business is developing chip designs for others. It's also a problem if you are the gatekeeper of a CPU instruction set that a metric ton of other infrastructure increasingly depends on. I really, really hope ARM's current business will be allowed to run independently as ARM knows how to do this and Nvidia has time and time again shown not to understand this at all. But I'm pessimistic about that. I'm afraid Nvidia will gut ARM the company, the ARM architectures, and the ARM instruction set in the long run.

[0]: An interesting counterpoint would the Nintendo Switch running on an Nvidia Tegra hardware, but all the evidence points to that this chip is a 100% vanilla Nvidia Tegra X1 that Nvidia was already selling themselves (to the point its bootloader could be unlocked like a standard Tegra, leading to the Switch Fusee-Gelee exploit).

[+] fluffything|5 years ago|reply
You are not wrong, but the facts you have cherry picked fail to portrait the whole picture.

For example, you paint it as if Nvidia is the only company Apple has had problems with, yet Apple has parted ways with Intel, IBM (Power PCs), and many other companies in the past.

The claim that Nintendo is the only company nvidia successfully collaborates with is just wrong:

- nvidia manufactures GPU chips, collaborates with dozens of OEMs to ship graphics cards

- nvidia collaborates with IBM which ships Power8,9,10 processors all with nvidia technology

- nvidia collaborates with OS vendors like microsoft very successfully

- nvidia collaborated with mellanox successfully and acquired it

- nvidia collaborates with ARM today...

The claim that nvidia is bad at open source because it does not open source its Linux driver is also quite wrong, since NVIDIA contributes many many hours of paid developer time open source, has many open source products, donates money to many open source organizations, contributes with paid manpower to many open source organizations as well...

I mean, this is not nvidia specific.

You can take any big company, e.g., Apple, and paint a horrible case by cherry picking things (no Vulkan support on MacOSX forcing everyone to use Metal, they don't open source their C++ toolchain, etc.), yet Apple does many good things too (open sourced parts of their toolchain like LLVM, open source swift, etc.).

I mean, you even try to paint this as if Nvidia is the only company that Apple has parted ways with, yet Apple has long track record of parting ways with other companies (IBM PowerPC processors, Intel, ...). I'm pretty sure that the moment Apple is able to produce a competitive GFX card, they will part ways with AMD as well.

[+] monocasa|5 years ago|reply
I'm not normally one to defend Nvidia (paratiulalrly not from my Linux laptop), but at least the Xbox and PS3 issues never really seemed to be their fault from what I've heard on the grapevine.

Xbox: The Xbox's security was broken, and Nvidia apaprently took the high road, claimed a loss on all existing chips in the supply chain (claiming a loss fo the quarter out of nowhere and tanking their stock for a bit) and allowed Microsoft to ship a new initial boot ROM as quickly as possible for a minimum of cost to Microsoft. When that new mask ROM was cracked within a week of release Microsoft went back to Nvidia looking for the same deal and Nvidia apparently told them to pound sand and in fact said that they would be doing no additional work on these chips, not even die shrinks (hence why there was no OG Xbox Slim). There are other reasons why Microsoft felt like Nvidia still owed them albeit, but it was a bit of a toxic relationship for everyone involved.

PS3: they were never supposed to be the GPU until the eleventh hour. The Cell was supposed to originally crank up to 5GHz (one of the first casualties of the end of Dennard scaling, and how it affected Moore's law as we conceived it) and there were supposed to be two Cell processors in the original design, and no dedicated GPU. When that fell through and they could only crank them up to 3.2GHz, they made a deal with Nvidia at the last second to create a core with an new bus interconnect to attach to the Cell. And that chip was very close to the state of the art from Nvidia. Most of it's problems were centered around duck taping in a discrete PC GPU into the console with time running out on the clock, and don't think that anyone else would have been able to deliver a better solution under those circumstances.

Like I said, Nvidia is a scummy company in a lot of respects, but I don't think the Xbox/PS3 issues are necessarily their fault.

[+] cogman10|5 years ago|reply
On the plus side it will probably really give RISC-V (and other platforms) a boost for the risk averse businesses.
[+] GloriousKoji|5 years ago|reply
Don't forget the GeForce Partner Program they pushed a while back which required partners to make their gaming brands exclusive to GeForce products. They ended up cancelling it and I bet the reason was due to all the anti-competitive violations the FTC would have slapped on them.
[+] Symmetry|5 years ago|reply
Also, it must be hard to trust them as the creator of the designs you use if they also compete with you directly in the market.
[+] jonny_eh|5 years ago|reply
At this point, do Apple and Qualcomm even depend on ARM's new designs? In the same way that AMD branched from Intel but are still mostly compatible, can the same thing happen in mobile chipsets?
[+] walterbell|5 years ago|reply
> Nvidia is the only suitor in concrete discussions with SoftBank, according to the people.

Would Arm stakeholders (i.e. much of the computer industry) prefer an IPO?

In 2017, Softbank's Vision Fund owned 25% of Arm and 4.9% of Nvidia, i.e. these are not historically neutral parties, https://techcrunch.com/2017/08/07/softbank-nvidia-vision-fun...

After WeWork imploded, https://www.bloomberg.com/opinion/articles/2019-10-23/how-do...

> Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission. What an absolute legend.

Is the global industry (cloud, PC, peripheral, mobile, embedded, IoT, wearable, automotive, robotics, broadband, camera/VR/TV, energy, medical, aerospace and military) loss of Arm independence our only societal solution to a failed experiment in real-estate financial engineering?

[+] Duhck|5 years ago|reply
ARM was public for a long time. In 2016 they were taken private by Softbank via a $32bn acquisition.
[+] valuearb|5 years ago|reply
ARMs IPO value is under $10B, revenue/profits too small, growth not strong enough.
[+] m3kw9|5 years ago|reply
Doing IPO would mean they will use the money raised meaningfully. Shareholders probably see more upside with Nvidia integration. I’m not really sure what ARM need a bunch of money for in an IPO, they are pretty established.
[+] nojito|5 years ago|reply
IPO'ing a business that only makes revenue from licensing arrangements is a recipe for disaster
[+] klelatti|5 years ago|reply
This is troubling.

At the moment ARM lives or dies by the success of the ecosystem as a whole.

When its owned by a customer this may no longer be the case and there are huge potential conflicts of interest. For example, would an Nvidia owned ARM offer a new license to a firm that would be a significant competitor to an existing Nvidia product (eg Tegra)? Will Nvidia hinder the development efforts of other competitors? Will Nvidia give itself access to new designs first? How will it maintain appropriate barriers to the flow of information about competitors new designs to its own design teams?

I can see this getting very significant regulatory scrutiny and rightly so.

[+] novaRom|5 years ago|reply
Once ARM is American it will escalate trade war with China. There's no way China can quickly create any competitive platform.
[+] Keyframe|5 years ago|reply
It's Nvidia circling back for a kill on intel. They didn't go head to head, even they wanted to. Instead they built a completely different space within data centers for them, got a foothold, expanded (mellanox) and now going for the missing piece, which will also allow them to expand the battleground with intel outside of datacenters. Interesting times and Nvidia, so far, showed they know their strategic moves.
[+] AsyncAwait|5 years ago|reply
NVidia is awful when it comes to FLOSS support. If they get ARM, at least it may accelerate RISC V developments.
[+] NotSammyHagar|5 years ago|reply
The other part of it is Softbank will be rescued from their idiotic and incredibly wasteful investments. They bought so much crap and had too much money and they still managed to buy a few valuable things, probably by accident. It's slightly infuriating. At least I'm happy to see amd succeeding by actual intelligent engineering.
[+] dekhn|5 years ago|reply
So basically, it will be two companies which own both the CPU and GPU stack (AMD/ATI and Nvidia/ARM) and intel will just sort of end up at the wayside. Not really what I expected.
[+] phkahler|5 years ago|reply
This would be bad. Not because of the CPU business - I think RISC V will eventually make that irrelevant. Once CPUs are open source commodities, the next big thing is GPUs. This merger will eliminate a GPU maker, and one that licenses the IP at that.
[+] mrweasel|5 years ago|reply
I know it says “more” than $32B but isn’t that a little low if Softbank paid $31B?

Neither Softbank nor Nvidia care what I think, but I would feel better if the buyer of ARM wasn’t a company with a existing chip business.

[+] mikece|5 years ago|reply
I wonder if it would be possible for a consortium of companies like Apple, Microsoft, and Google to swoop in and outbid Nvidia? All of them rely on customization agreements with ARM and Nvidia, being a chip maker, would be competition. And a consortium like that would allow the consortium members to keep their changes to themselves so whatever Qualcomm and Microsoft are doing with the SQ1 or Apple with their Silicon stuff wouldn't have to be shared will all consortium members -- or a competing chip maker like Nvidia.
[+] yalogin|5 years ago|reply
Why is ARM selling itself? May be I am missing something here but if Qualcomm can generate a bulk of their revenues through licensing fees, shouldn't ARM be bringing in more? It feels like going public would be a profitable route for their investors. Wonder why they are opting for that.
[+] smitty1110|5 years ago|reply
ARM is owned by SoftBank, who has had a very bad year and a half. I guess they just want cash, not to take it public.
[+] kev009|5 years ago|reply
Wireless technology is a patent minefield. CPUs generally aren't because the techniques for internals are old, and internal design, manufacturing, and especially validation (where intel fell flat lately) methodologies dominate the costs and quality.

For much of ARM's recent volume use in MCUs and slightly larger embedded devices, there is credible threat from first party usage of RISC-V (see WD, Nvidia).

Access to the ISA itself can be of high value.. see x86 and s390x for prime examples. Although I don't really see how ARM could pull that off outside being an acquisition like this, and making the licensing process onerous enough that people move to buying chips from nvidia instead of doing their own designs. In such a scenario, RISC-V can become a credible threat to phones too, and the server thing pundits keep pushing for the past 15 years never happens.

So there is a lot of value here, but it's pretty hard to grow as a pure licensing play as ARM has been since there are many risks and opportunities for price compression.

[+] jannes|5 years ago|reply
ARM is wholly owned by an investor called SoftBank, who is desperate for cash right now, because they messed up with WeWork.
[+] tw04|5 years ago|reply
ARM isn’t selling itself. SoftBank bought ARM several years ago. I would imagine all the cash they hemorrhaged on wework has finally forced their hand.
[+] trynumber9|5 years ago|reply
Interesting, Nvidia has been using their own RISCV designs in their GPUs. Perhaps they are more interested for their automotive line?
[+] mytailorisrich|5 years ago|reply
If that happens it may have wider consequences.

ARM would become owned by an American company. It has to comply with American restrictions on dealing with China but that would make it essentially no different from any other American company, either legally or in fact.

So in the current context this would be bound to raise eyebrows in Beijing, and China could only react by doubling-down on developing domestic alternatives.

[+] shasheene|5 years ago|reply
Yep, the United States government gaining the ability to directly block the licensing of ARM reference designs from companies like Huawei's HiSilicon (and the fabless chip designers such as Rockchip) is a VERY big deal. It's a very different situation to the US government having to pressure Japan's SoftBank, UK's ARM Holdings (or their respective governments).
[+] sfifs|5 years ago|reply
I'm kind of wishing this trend will push investment in something open like RISC V. Up and coming countries should definitely be thinking - if US targets China today, it could be them next.
[+] natch|5 years ago|reply
Can anyone explain what is going on between Apple and Nvidia? Seems Apple will not add Nvidia hardware to its machines no matter what. What’s the back story to that?

And where this is related is I wonder if Apple will have to relent (assuming the purchase goes through) and do business with Nvidia since it licenses some technology from ARM. Or, have I got it wrong here? Does Apple not rely on ARM?

[+] selectodude|5 years ago|reply
NVIDIA really ratfucked them with the GPUs in MacBook Pros maybe a decade ago. They started failing like crazy, NVIDIA said they fixed it, they hadn’t, and then when things went to litigation NVIDIA blamed Apple for the GPU failures. Apple ran a giant recall and swore off using NVIDIA ever again.
[+] lowbloodsugar|5 years ago|reply
Google "macbook faulty nvidia". e.g. [1] references to "arrogance and bluster" from Nvidia.

My personal experience: I had a 2011 Macbook Pro with an nvidia card. It started to fail randomly. Apple identified that certain nvidia GPUs were failing and created a test the "Geniuses" would run. My Macbook always passed, even though it kept throwing noise on the screen anywhere other than the Apple store. Eventually it finally failed their test: Four days after the (extended) warranty period. They refused to replace it. Bitterly, the best option for me was to pay the $800 for a new board.

[1] https://appleinsider.com/articles/19/01/18/apples-management...

[+] dudus|5 years ago|reply
SoftBank purchased ARM for $32B in 2016. If this figure is correct it looks terrible for SoftBank. Another one in a string of bad investments.
[+] growlist|5 years ago|reply
Depends how much they've milked it in the meantime.
[+] cromwellian|5 years ago|reply
I think people are overlooking a worse outcome. Chinese companies have already bought the Asian subsidiary of ARM, if China bought ARM who knows how they would retaliate with it given the current attacks on Huawei. They might use it as leverage.

realistically we need an open unowned architecture like RISC-V, because whoever buys ARM will cause concern given how hyperconpetitive mobile is, the incentive to abuse the ownership is high.

We really want to avoid another Oracle/Java scenario as well.

[+] xbmcuser|5 years ago|reply
Looking at how qualcomm has a virtual monopoly for mobile processors nvidia buying arm and getting back into the mobile space might be a good thing. Though I think this is more a play for desktop processors intel is getting into discrete cpu market Amd already is. Every year integrated gpus are getting better at giving good enough performance so the market for discrete gpus will decrease in the end Nvidia might need its own cpu to stay relevant.
[+] Abishek_Muthian|5 years ago|reply
Oh no, look what have you done WeWork. Who would have thought that rich kids burning VC money, who themselves were running elaborate ponzi scheme would end-up as a threat to the democracy of computing.

Ofcourse U.S. Govt. wouldn't have problems with this unlike Broadcom-Qualcomm deal, on the contrary this will put American semiconductor industry in a more dominant position.

RISC-V is the only hope for the rest of the world now.

[+] yydcool|5 years ago|reply
This would be good. I'm waiting to see high performance PCs running on ARM CPU instead of x86.
[+] InTheArena|5 years ago|reply
This isn't a bad move strategy wise. If the Apple performance is as awesome as is rumoured and hype, there are going to be a lot of people looking for new arm chips, with no obviously ahead players. nVidia has looked a couple of times at building their own x86 core, and ARM cores may be a better bet.

At this point - AMD, Intel, Apple are all looking at fully integrated APU/CPU/GPU stacks. That leaves NV out in the cold if they don't do something.

[+] kyriakos|5 years ago|reply
Looking further into the future nvidia buying arm now means they could have their cpus and gpus in the next generation of consoles instead of amd
[+] als0|5 years ago|reply
Except AMD has:

* better single threaded performance than ARM

* the same instruction set as developers' workstations

* the willingless to add Microsoft/Sony's hardware IP to the console chips