Nvidia set to Acquire ARM in a $40-Billion Deal – What Now?

Nvidia states the company will continue to follow Arm’s open-licensing model and will expand the company’s IP licensing portfolio with Nvidia technology. (Image credit: Nvidia)

Nvidia has become central to everything enginnering. Nvidia recently announced the coming acquisition of Arm Limited from SBG (SoftBank Group Corp) for an astronomical $40-billion, which will be paid through shares and cold, hard cash. “The combination brings together NVIDIA’s leading AI computing platform with Arm’s vast ecosystem to create the premier computing company for the age of artificial intelligence, accelerating innovation while expanding into large, high-growth markets,” states Nvidia in their latest press release. “SoftBank will remain committed to Arm’s long-term success through its ownership stake in NVIDIA, expected to be under 10 percent.”

Naturally, the acquisition has sparked a lot of questions among makers and hardware manufacturers alike, concerning the fate of Arm’s wide-ranging chip designs and architecture-licensing business, which drive most of the world’s electronic devices. In a recent conference call with analysts, Arm CEO Simon Segars stated that the company will maintain its neutral business model and will keep a level of independence, which suggests the CPU manufacturer will continue on its present course, at least in the short term. Still, the two companies will not be completely separate, and its unclear what level of autonomy Arm will ultimately sustain, as Nvidia says Arm partners will also benefit from both company’s offerings.

That said, Arm will benefit from Nvidia’s economic boost for R&D spending, and will remain headquartered in Cambridge, England, which Nvidia plans on turning into a “world-class technology center.” Nvidia has plans to build a state-of-the-art AI supercomputer at the campus using Arm’s CPUs, and establish an AI research and education center as well. AI is a central focal point for Nvidia, as their Tensor and CUDA cores dominate even their consumer-end video cards to produce HD rendering using less RAW GPU power.

“AI is the most powerful technology force of our time and has launched a new wave of computing,” said Huang. “In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today’s internet-of-people. Our combination will create a company fabulously positioned for the age of AI.”

While the Nvidia press release is written to assuage initial fears and doubts, there is always a dark side, and several analysts point to legitimate possibilities. Many of Arm’s licensees have taken a pause, including Qualcomm and Broadcom, as a once open-license model has been purchased by a direct chip-producing competitor with Nvidia, and it’s unlikely that the open-source model will remain that way in the long term.

Nvidia competitors will also worry that the company will receive an unfair competitive advantage since they won’t have to pay royalties for Arm property. Will those companies also have to pay royalties to Nvidia for Arm technology, and will their proprietary use of Arm CPUs be compromised? Both fair questions, but only time will tell. 

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