After months of speculation, the cat is finally out of the bag. In about 18 months from now, Nvidia is expected to close a buyout of ARM from SoftBank for a spectacular $40 billion. This would be the biggest chip deal to date, since SoftBank purchased ARM for $31 billion in 2016. That is of course if the regulatory bodies in the US, UK and China approve the deal to go through, which Nvidia hope they would. What does this mean for the tech industry? A new wave of speculations is already brewing up as the tech community tries to figure out the answer to this.
One Design to Fit Them All
ARM designed chips power everything from servers, smartphones, tablets, Chromebooks, laptops, routers, IoT devices, AI hardware, and the list goes on. Earlier this year, Apple, one of ARM’s biggest partners, announced the switch to inhouse designed chips (Apple silicon) that support the ARM instruction set, throughout the entire product lineup. Ditching Intel’s x86 based chips which were being used in the Mac lineup. This goes to show the popularity that the RISC architecture, especially ARM designs and the ARM instruction set has gained over the years. To add to this, ARM has made significant inroads into the AI space with chips specifically perfected for machine learning.
ARM Promotes the Freedom of Design
Up until now ARM’s revenue stream focused on licensing out their own designs such as the Cortex series that is being used inside chips made by Qualcomm, Samsung, MediaTek, Broadcom, and architectural licensing agreements they have had with the likes of Apple, Samsung, Qualcomm and ironically, Nvidia itself. Such licensing agreements mean that whoever in possession of them can keep on designing their own chips that conform to the ARM instruction set and are not limited to using ARM designs or technologies.
This means that the buyout may have little to no impact on likes of Apple, Qualcomm, and Samsung, because such architectural licenses are concrete and cannot be taken away. They will be able to keep on developing their own chip designs. Even though some of the most popular chips made by Qualcomm and Samsung, such as the Snapdragon and Exynos lineups use ARM technologies and designs, architectural licensing agreements enable them to produce designs which are entirely made inhouse, moving away from Cortex. In the most ironic development of this story, if the buyout goes through, and Nvidia decides to keep on designing their own chips under ARM architectural license, they may very well be competing with their own business unit for supremacy.
Will Nvidia End it All?
One of the biggest concerns brought forward by the announcement is whether ARM will remain as it is after the buyout, whether they will continue licensing out its designs and technologies to partners. And if they continue to do so, how Nvidia will handle the conflicts of interest, selling ARM designs to competitors. Jensen Huang, the CEO of Nvidia is quite adamant in reassuring that ARM will continue to be what it is and that it is in Nvidia’s best interest to be a part of the ARM ecosystem. Of course, causing damage to the ARM ecosystem and losing ARM’s partners would mean a severe kick in the gut to Nvidia. A $40 billion dollar kick to be precise.
“Nvidia” the Force Grows Stronger
Source: Star Wars
Nvidia is mostly known for their dominance in the GPU industry. From the discrete GPU in your laptop, high-end GeForce GPUs in gaming rigs, Quadro workstation GPUs to super-fast mobile GPUs, Nvidia has reigned supreme in this space. Nvidia’s CUDA compute engine-based GPUs, while being quite popular amongst bitcoin miners, have taken the AI and Data landscapes by storm, as they are used to power datacenters, laboratories, and autonomous vehicles. Does this mean Nvidia will be suppressing the commitment ARM has made to GPUs and AI? What does the future hold for the research ARM has already carried out in these spaces? Sure enough, Jensen does not hesitate to reassure that ARM will be free to incorporate their own GPU designs and AI compute units into ARM chips going forward.
What’s in it for You?
So, is it all butterflies and sunshine in the world? Not quite. There are more sides to the story. What if you are a startup or a small to medium business that just made a 5 to 10-year commitment to making your own tech using ARM technologies? And the sanctions that are being imposed on Chinese brands such as Huawei, who had been developing their own Kirin chips based on ARM, would be in serious doubt whether they should be making a 5 to 10-year commitment to ARM.
Should such entities continue to invest in ARM? Or should they think about an alternative such as RISC-V? This will continue to be a hot topic discussed at board meetings, no wonder. Rivals of Nvidia, the likes of Intel, and AMD could very well start backing an architecture like RISC-V in opportunistic moves. In the same light, a giant such as Huawei would do the same out of desperation. This story will keep on unfolding in the coming 18 months, as the tech world looks on in anticipation.
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