Nvidia could buy ARM from Softbank (update)

[midian182]

Rumor mill: Nvidia has shown interest in acquiring Arm in what would be one of the most significant and likely expensive tech deals of all time. Should Team Green take control of the semiconductor designer, it could gain a tight grip over much of the industry, meaning any acquisition is likely to be met with intense regulatory scrutiny.

Update (July 31): What only seemed like a wild rumor a week ago, has gained substance over the past week. Both Bloomberg and Financial Times are reporting that Nvidia is in talks to buy the Arm from SoftBank in a cash-and-stock deal that would value the chip designer at more than $32 billion. Back in 2016, Softbank paid around $31 billion for UK-based Arm, which became part of the Japanese conglomerate's $100 billion Vision Fund—the world’s largest venture capital fund.

Nvidia may see itself in a perfect position for the takeover and the unique opportunity presented considering its stock has skyrocketed, gaining over 50% in value this year and more than doubling since mid 2019. According to Q2 filings, Nvidia also has over $15 billion of cash on hand.

Softbank has been offloading some of its assets recently to help lessen the impact of the Coronavirus-related economic downturn. Part of its holdings in Alibaba Group and T-Mobile have been sold off, and it is looking to sell part or all of its stake in Arm; it's also considering an IPO for the design company.

Largest tech deals in history:

Company	Acquisition	Price	Year
Dell	EMC	$64 billion	2015
Avago Technologies	Broadcom	$37 billion	2015
IBM	Red Hat	$34 billion	2018
Softbank	ARM Holdings	$31.4 billion	2016
Microsoft	LinkedIn	$26.2 billion	2016

Softbank once owned part of Nvidia, having amassed $4 billion of shares in 2017, but all its holdings in the firm were sold off last year. According to Bloomberg, Nvidia recently made an approach to buy Arm. Increased demand in the gaming, hardware, and data center sectors has seen Nvidia’s stock soar this year. Shares currently stand at $417, giving it a market cap of $256 billion. For comparison, rival AMD has a value of $72.3 billion.

Arm has long licensed its technology to some of the industry’s biggest players, and has seen its profile rise even higher in the past few months as the Arm-powered Fugaku became the world’s fastest supercomputer, and Apple announced it was transitioning the Mac away from Intel’s chips to a custom Arm-based SoC.

It’s likely that an Nvidia acquisition of Arm would bring anti-competitive questions from regulators. The latter’s chip architecture designs and IPs are found across a vast range of products, and handing that much power to Nvidia would concern licensees, especially Apple. The claims are all rumors for now, so we can’t be certain of their accuracy, but if a deal does eventually go through, it will shake up the industry like nothing before.

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https://www.techspot.com/news/86101-report-nvidia-considering-buying-arm.html

 

[R00sT3R]

..If they get it, it wont be long before we see ARM co-processors sitting on Nvidia's GPU's.

They could have a transformative effect on being used for ray tracing calculations, for example.

 

[Uncle Al]

And on the down side, with that much power and control the prices could skyrocket ....

 

[Lounds]

I can't see how this benefits Nvidia, ARM sells CPU designs to manufacturers of ARM CPUs and the biggest reason why Nvidia doesn't have much of a foothold in the mobile space is because their SoC's cost too much to put in mobile phones. So apart from making money from just owning ARM as a growing company I can't see how it benefits Nvidia's integration into the ARM world of designs?

 

[Mister_K]

And on the down side, with that much power and control the prices could skyrocket ....

They are already high, do you think gamers will pay 1.5x or even 2x the current price of GPUs? Some will, maybe the some will outweigh the lower sales. I certainly would still purchase top end consumer GPUs for work, but I rather not pay anymore than they currently are.

Someone really needs to kick Nvidias teeth, hard. It's a shame there is literally no competition in the GPU market

 

[Irata]

..If they get it, it wont be long before we see ARM co-processors sitting on Nvidia's GPU's.

They could have a transformative effect on being used for ray tracing calculations, for example.

They are already licensees and have their own ARM based CPU, so nothing‘s stopping the from doing that already. No need to buy the company for that. I am actually quite surprised they have not invested in the development of server grade ARM CPU yet in order to be able to offer all-nVidia AI servers.

Imho, this may actually be a move to put pressure on other players in the industry by Softbank. Have so far only read that nVidia is not exactly fun / easy to work with.

 

[neeyik]

The acquisition of Arm isn't about graphics cards or any rendering technology - aside from having general financial control over a widely used IP, it would give Nvidia further leverage in the compute and machine learning market: Amazon, Marvell, Ampere, etc all use Arm IP for their server CPUs. It would also give scope for Nvidia to abandon AMD/Intel for their DXG products.

 

[Omikron777]

I don't see the problem. 5yrs ago, 4yrs ago, 3yrs ago, 2yrs ago...whatever, up until very recently, everyone thought ARM chips to be far inferior to Intel & AMD. Now Apple jumps aboard, and Nvidia is the biggest threat to computing...ever...(?). Except ARM & Nvidia have worked together a lot, and it would make sense for them going into Autonomous Navigation Systems for Cars & other Industrial Equipment; Hospital, ER Equipment, Security Systems, etc.; plus, Nvidia could have already Capitalized massively in console gaming, but they backed off and partnered with Nintendo to bring the Switch into existence; they partnered with Google to bring Stadia. They have the Shield TV platform...that has dominated other ARM based boards & up until recently, has started to show its age. But GeForce Now is out of Beta, they are partnered with Steam, and if Google Stadia succeeds or fails, they'll discontinue it in short order, if they haven't already...(?). Even with the New Gen of Consoles coming up; Nvidia's work with the Shield TV as a side project, a one-off...if they built a Tegra X1 Successor, they could release a Shield II and undercut Sony and M$ by 50% MSRP, and continue to bring PC games to Console gaming via Steam & GeForce Now & Retro/Budget/Indie via Android, and become a serious gaming platform contender. Console Gamers have been promised PC games since the 3DO's planned successor, the M2 Accelerator (turns out, $900 was the wrong price point in 1994 for console gaming...& It didn't work out); but where they failed...countless more have failed as well over the years. It's been an abomination. Nvidia has actually made real progress and could actually do what Google claims...but...will discontinue if Stadia fails or is a wild success regardless...that's what they do. Nvidia is still with the Shield TV. And Apple doesn't care...they can either leverage buying power to continue to use their custom GPUs with ARM cores or they'll have the option to place Nvidia graphics in their new ARM-only escapade. That benefits the market...

Anyhow; Nvidia has a vested interest in Industrial Computing, AI Systems across many sectors, not just Auto...so it doesn't really seem that aggressive across the computing spectrum; no more so than Intel grabbing up every Asics company, including eASICS that has the potential to become extremely aggressive in computing; when fab time and cost on Asics is reduced by 70-80%, and they still offer high-customization, that arguably should have been blocked, or monitored heavily by regulators because that is ostensibly a Monopoly, and if the tech comes to fruition, Intel most certainly would leverage all their acquisitions, along with their fast-to-fab multi-custom layer Asics....even if you didn't want that, and wanted to develop a 100% custom Asic & have that IP fabricated, Intel would still be the gatekeeper. And when Apple turned away from x86, part of me thinks that maybe Intel and AMD weren't blind; they could have just as easily.... unfortunately, each wanted to be chips that burned energy...high-clock speeds, with 8+ cores & hyperthreading...at a certain point, what's the point...? Any virtualization service would happily spin you up an instance with whatever you needed; owning one of these slugfest chips from AMD or Intel just becomes a status symbol...or compensation for what's inside the purchasers pantaloons....(?).

With the crypto v gaming war, that poisonous atmosphere has at least been drifting away from Nvidia. Which is good...because they have great tech, and their image has improved imo, when they dropped the Shield TV in price a year and a half ago now (?), people finally discovered a really awesome product by Nvidia. And their Jetson hardware just swooped in with the nano, an incredible deal for AI hardware, then the AGX price drop; then the release of the (?) NX at a reasonable price; their release of drivers to Linux... I think Nvidia has been improving their image quite a bit compared to how nasty people were just a couple years back vs Nvidia. Then, all these graphics cards everywhere...then some more, .....these ones here are "Super!" I say let them buy ARM; see what they can do with their IP unrestricted...

 

[mbrowne5061]

..If they get it, it wont be long before we see ARM co-processors sitting on Nvidia's GPU's.

They could have a transformative effect on being used for ray tracing calculations, for example.

Nothing really stops them from doing that now anyway. What would a CPU co-processor have to do with even ray tracing calculations? Those are still poly-based calculations, which CPUs are terrible for.

 

[Morris Minor]

Should cost them an arm and a leg...


I'll get me coat.

 

[Rayneofpayne]

..If they get it, it wont be long before we see ARM co-processors sitting on Nvidia's GPU's.

They could have a transformative effect on being used for ray tracing calculations, for example.

Parallel workloads distribution, think Async compute engine from AMD. Intel experimented with a university in doing this and found out there is nill latency.

 

[Mr Majestyk]

The regulators to stop this dead in its tracks, this would be a disaster for consumers and the industry. Last thing is we need Hand of Huang controlling ARM IP.

 

[Beerfloat]

Apple has a perpetual license to the ARM instruction set and its own ARM cores are designed completely in-house. They have no cause for concern.

This would be a bold move by Nvidia, even more so than their 7B Mellanox acquisition, but I think Softbank paid way too much for ARM and Nvidia should only consider this if there is a considerable discount to the 32B ownership fee.

 

[Lounds]

They are already high, do you think gamers will pay 1.5x or even 2x the current price of GPUs? Some will, maybe the some will outweigh the lower sales. I certainly would still purchase top end consumer GPUs for work, but I rather not pay anymore than they currently are.

Someone really needs to kick Nvidias teeth, hard. It's a shame there is literally no competition in the GPU market

We need another ATI 4870/4850 moment.

 

[Lounds]

Apple has a perpetual license to the ARM instruction set and its own ARM cores are designed completely in-house. They have no cause for concern.

This would be a bold move by Nvidia, even more so than their 7B Mellanox acquisition, but I think Softbank paid way too much for ARM and Nvidia should only consider this if there is a considerable discount to the 32B ownership fee.

I believe it was the biggest buyout of a UK based company. Apart from when the UK government bought out the banks in 2008.

 

[Mister_K]

We need another ATI 4870/4850 moment.

We can only hope, but unlikely

 

[Thanthan]

This would not end well for AMD in the long run.
AMD is a component company with little to no expansion outside of that.

For the advancement of tech, this is a great idea and Nvidia should do it if they think they can handle it.

Noone in the tech industry wants to see an nvidia monopoly. Theres a reason Apple, console makers and Linux developers All hate nvidia. Theyre a terrible company to work with by All accounts. They would Come out with some interesting stuff in the short term sure, after that though.. Rtx pricing anyone?

 

[Azshadi]

Noone in the tech industry wants to see an nvidia monopoly. Theres a reason Apple, console makers and Linux developers All hate nvidia. Theyre a terrible company to work with by All accounts. They would Come out with some interesting stuff in the short term sure, after that though.. Rtx pricing anyone?

There's no such thing as hate in the business world. They just need to sweeten the pot. Nobody is hating on nvidia they are just going for what's more profitable in the long run... Why should you pay nVidia $15 when you can pay AMD $5?

 

[Evernessince]

The acquisition of Arm isn't about graphics cards or any rendering technology - aside from having general financial control over a widely used IP, it would give Nvidia further leverage in the compute and machine learning market: Amazon, Marvell, Ampere, etc all use Arm IP for their server CPUs. It would also give scope for Nvidia to abandon AMD/Intel for their DXG products.

Blocking out competition is what I suspect is Nvidia's intended move. I personally feel that threat is high enough where should they attempt an acquisition the government should step in and prevent it.

Apple has a perpetual license to the ARM instruction set and its own ARM cores are designed completely in-house. They have no cause for concern.

This would be a bold move by Nvidia, even more so than their 7B Mellanox acquisition, but I think Softbank paid way too much for ARM and Nvidia should only consider this if there is a considerable discount to the 32B ownership fee.

Unless you have the license agreement in hand it's impossible to say whether apple is secure or not. Often times they include exit clauses and even if they don't, there's no definite settled law on what happens when a perpetual license is canceled. In otherwords, you are relying mostly on the goodwill of the company you are doing business with and that of your lawyers. Who knows what that contract contains but Nvidia isn't exactly sue shy.

https://www.larsenlawoffices.com/can-terminate-perpetual-licensing-agreement/

Noone in the tech industry wants to see an nvidia monopoly. Theres a reason Apple, console makers and Linux developers All hate nvidia. Theyre a terrible company to work with by All accounts. They would Come out with some interesting stuff in the short term sure, after that though.. Rtx pricing anyone?

Just ask Linus Torvalds

I really don't trust Nvidia having this much leverage over a market. They have proven time and time again they will abuse it without a doubt.

 

[Nobonita Barua]

ARM surely isn't that crazy

 

[candle_86]

Good for them, this may be a move to get into CPUs, remember Intel denied them an x86 license 8 years ago. They may want to use this as leverage to get into that market actually.

 

[Beerfloat]

Blocking out competition is what I suspect is Nvidia's intended move. I personally feel that threat is high enough where should they attempt an acquisition the government should step in and prevent it.

Blocking out what competition, and where, though? Nvidia is neither a major ARM dealer nor are low margin commodity chips their business. And let's not pretend Mali is more than small fry GPU IP more often than not swapped out for some other solution.

Nvidia's primary motivation is to make money. ARM is successful because it has spawned such a diverse ecosphere. Increasing licensing fees, sure. Making Qualcomm, Mediatek, Rockchip, Marvell etc etc pay more, sure. They can go Power or MIPS or RISC-V (or try go x86 even, Intel might not be as adverse anymore now that their moat is getting smaller and smaller) if it becomes egregious. Blocking competition? Just how?

Unless you have the license agreement in hand it's impossible to say whether apple is secure or not. Often times they include exit clauses and even if they don't, there's no definite settled law on what happens when a perpetual license is canceled. In otherwords, you are relying mostly on the goodwill of the company you are doing business with and that of your lawyers. Who knows what that contract contains but Nvidia isn't exactly sue shy.

Well, Apple is arguably even worse in that respect. I'm pretty confident that license will be ironclad. This really shouldn't be a serious concern.

Just ask Linus Torvalds

I love Linus as much as the next guy but his personal opinion is not particularly relevant to any of this.

I really don't trust Nvidia having this much leverage over a market. They have proven time and time again they will abuse it without a doubt.

I don't trust most corporations in general but as far as potential for abuse of dominance goes this isn't all that high on my list.

 

[Evernessince]

Blocking out what competition, and where, though? Nvidia is neither a major ARM dealer nor are low margin commodity chips their business. And let's not pretend Mali is more than small fry GPU IP more often than not swapped out for some other solution.

ARM based designs are in a variety of products from server to ultra portable to AI to Autonomous driving. In case you were not aware ARM released an AI chip back in February. This move is largely to exert control over the market and prevent potential competition in lucrative markets Nvidia is currently in like AI. The GPU IP held by softbank itself is irrelevant, it doesn't matter if other companies make their own custom GPU solution if they still need ARM licenses for their CPU. Having patents on ARM itself also means that they control who can and can't use the architecture, similar to how AMD and Intel are the only ones that can make X86. All that means is even if you make a custom design, if it's based on ARM you still need to pay the piper.

In essence Nvidia buying ARM puts it in a position where it's suddenly competing with many of it's customers. That won't last long. It'll also have a dominate ARM portfolio that will give it control over ARM and any architecture based off that design. It's one thing for a neutral company to own ARM, it's another for a company with already a very broad reach across the market to buy it.

 

[Rayneofpayne]

..If they get it, it wont be long before we see ARM co-processors sitting on Nvidia's GPU's.

They could have a transformative effect on being used for ray tracing calculations, for example.

No, Intel along with a university already used this, GPUs despite being heavily parallel still need a solution as the calculations are still done in serial, I am sure if you are into architectural news you know about AMDs Async compute engine that relied on hardware implementation, the problem was it still needed software to natively run, meaning it had to be supported to be used. Intel's/Univerities version didn't it runs on firmware and is used regardless of support. Now in DX a software solution is supported however that adds latency and can effect scheduling latency times., Hardware doesn't have that limitation. So I would expect to see ARM eventually attached to serial executed chips with the sole purpose being to be a hardware based scheduler and parallel parser.

I would like to add this is similar to what Apple is doing with their custom silicon, it's not the fastest on a core for core basis however it is alot more efficient adding a crap ton of bandwidth and using the machine learning smaller cores to basically parse tasks to the larger ones hence why using their OS they can make huge numbers from optimizational improvements.

 

[McMurdeR]

Someone really needs to kick Nvidias teeth, hard. It's a shame there is literally no competition in the GPU market

I've been thinking that for a long time. In the early days you could get Nvidia's cutting edge chips for less than 3 hundred bucks. Nowadays they've managed to segment their gaming grade products from cheap-as-chips right up to 4 figure sums for niche customers. And it's because no one can touch them for hardware performance and driver quality.

There are headwinds though - AMD effectively owns the console gpu space, and still has a foothold in discreet. And Intel is also sniffing around the discreet market, and they have a lot of cash to throw at it if they wished. Neither can produce products as good as Nvidia's at this time, but they will certainly dilute the market and put the brakes on price expansion. And there's always the chance they'll put out a great design somewhere down the road.

Hense Nvidia has been branching out of gaming gpus for a long time now - and doing a very good job of it too. That's what this is all about. Contolling ARM would make them a major force in semiconductor.