Nvidia abandons deal to buy ARM spawn

MfA · Jun 10, 2021

The Chinese CEO is ransoming ARM for 100s of millions to get control back of ARM China, while continuing to run it corruptly as all hell.

The west should never have opened up trade with China, giant mistake.

PSman1700 · Jun 10, 2021

I'd rather have Nvidia aquiring ARM then, yes.

Tkumpathenurpahl · Jun 18, 2021

pcchen said: ↑

There's a simple overview of the situation in this news article:

https://www.eenewseurope.com/news/lawsuits-around-arm-china-put-nvidia-deal-doubt
Click to expand...

Wu's hold on ARM is partly due to local Chinese law which makes it difficult to change control of a company without physically holding the company stamp and registration documents. Despite his so-called sacking in June 2020 Wu has simply refused to give them up.
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So there's absolutely no legal means in China by which he can be made to give them up? In a country with genocidal prison camps, the notion of arresting a fired CEO and telling him to play ball is apparently going too far?

Deleted member 13524 · Jun 18, 2021

Tkumpathenurpahl said: ↑

So there's absolutely no legal means in China by which he can be made to give them up? In a country with genocidal prison camps, the notion of arresting a fired CEO and telling him to play ball is apparently going too far?
Click to expand...

Oligarchs are the law. It's everyone else who's in the wrong, in the eyes of an absolutist government.

DegustatoR · Jun 18, 2021

At the Six Five Summit Thursday, Arm CEO Simon Segars made the case that if it stays independent, Arm wouldn’t be able to keep up with the increasing demands of its customers for more complex chips that can perform a wider variety of functions.

“As I think of in the future, the range of products our licensees want to build is growing and growing,” Segars said. “What they’re asking from us is increasing and increasing because of the complexity going up, and there is no way that we can do that on our own.”

Beyond supporting Arm at a larger scale, Nvidia CEO Jensen Huang said the acquisition is an opportunity to create a company that can generate even more new ideas, and bring more innovation to its customers in the form of intellectual property.

“The benefit to the market, and to the Arm customers will be more IP, better IP, more accelerated road maps and hopefully taking Arm to the far reaches of what is becoming …the diversity of computing that is literally going in every single direction,” Huang said. “You’re covering from cloud, to edge, to [internet of things], to high performance computing, to microprocessors, to accelerated computing—everything.”
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https://www.barrons.com/articles/ceos-nvidia-arm-chip-tech-merger-51623965440

And in related news: Rumor: Samsung may be hiring ex Apple and AMD engineers to design a custom CPU

xpea · Jun 20, 2021

from my usual contacts, I've heard that EU and China are on a good way to provide approval on the NVDA ARM deal. Biggest challenge by far will be... USA
I guess because of the multiple complains from competitors but then China should be the same with Huawei ZTE and so on. So I'm confused...

Silent_Buddha · Jun 20, 2021

Tkumpathenurpahl said: ↑

So there's absolutely no legal means in China by which he can be made to give them up? In a country with genocidal prison camps, the notion of arresting a fired CEO and telling him to play ball is apparently going too far?
Click to expand...

China doesn't require "legal" means to remove it from him.

What China lacks is the desire to remove it from him.

Or more precisely, China isn't doing anything about it because they want to keep control of it.

At any moment they could force him to give it up regardless of the "laws" that are on the books in China. Those are regularly ignored or changed to suit the government's whim.

It's unfortunate, as the previous regime had made great strides towards making the country more open, transparent, and was starting to take some real steps towards a form of democracy and respect for human rights. Then Ji Jinping came to power and he's worked hard to push China's government back to Mao era levels of government control, albeit while allowing some form of capitalism as long as the companies do what the government tells them to do. All of which started with eliminating most of the party members that were part of the previous regime that pushed for more rights for the Chinese populace.

Regards,
SB

xpea · Jun 30, 2021

https://www.hardwaretimes.com/nvidi...-billion-5x-more-than-amd-2x-more-than-intel/

Citi raised the possibility of NVIDIA acquiring Arm from 10% to 30%, primarily because three major licensees including Broadcom and Marvell Technology have decided to support the transaction.
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That's interesting.
Marvell is both competitor and partner so it's possible to support the deal. But Broadcom?
Anyway, if the story is true, with NVDA getting support from 2 majors silicon powerhouses, it will be much easier to sale the acquisition to the government...

pharma · Jun 30, 2021

xpea said: ↑

https://www.hardwaretimes.com/nvidi...-billion-5x-more-than-amd-2x-more-than-intel/
That's interesting.
Marvell is both competitor and partner so it's possible to support the deal. But Broadcom?
Anyway, if the story is true, with NVDA getting support from 2 majors silicon powerhouses, it will be much easier to sale the acquisition to the government...
Click to expand...

The 3 current supporters are Broadcom, Marvell and MediaTek.

In a related story by CNBC, Hock Tan, Broadcom’s president and CEO, said that his company backs the Nvidia Arm deal. “Arm is a key partner to Broadcom, and access to its technology is important to our current and future success,” he told CNBC in a statement. “Broadcom supports Nvidia’s proposed acquisition of Arm because Nvidia has assured the industry that it will increase the overall investment in Arm’s technology and that it will continue to make that technology available to the industry on a fair, reasonable and non-discriminatory basis.”

Marvell’s CEO, Matt Murphy, also told CNBC that his company has received proper commitments by Nvidia that address Marvell’s concerns about how potential changes to the Arm ecosystem could have negatively affected his company. With those concerns resolved, Murphy told CNBC that he envisions benefits to the deal, including “an acceleration of roadmaps for high-end CPU cores and the enablement of broader adoption of Arm-based designs in the industry.”

At MediaTek, the Taiwanese mobile chip developer, CEO Rick Tsai, has also voiced his support for the deal. “The semiconductor industry will benefit from the combination of NVIDIA and Arm,” Tsai said in a statement posted on an Nvidia web page outlining the proposed acquisition. “The combined open platform will enhance and accelerate delivery of critical computing technologies, including CPU, GPU and AI. We believe that the merger will enable MediaTek and other industry participants to bring more competitive and comprehensive products to the marketplace.”
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On a related note one reason for Nvidia garnering this support is likely related to Qualcomm's interest that was reported 6 days ago if the Nvidia-Arms deal failed.

Qualcomm also mentioned that it would be purchasing a share of ARM alongside other major industrial companies such as Tesla and Amazon. To persuade regulatory bodies to reject the acquisition, Qualcomm also mentioned that there are many companies against the acquisition. The acquisition would also be harmful to the British firm’s independence and potentially harmful to the British economy.
...
While not the same as an acquisition, Qualcomm purchasing a share of ARM does raise cause for concern when considering the business practices of Qualcomm. From integrating their technology into global standards to charging customers for technology licenses that they do not use, Qualcomm is far from perfect in this situation. It could be argued that Qualcomm themselves are being highly hypocritical.

While Qualcomm having a portion of ARM would not be able to control it outright, it would give Qualcomm a foot in the door to ARM and its decision-making process. Furthermore, Qualcomm’s somewhat immoral businesses practices could easily spread into ARM management and see a push towards unfair licensing terms. Thus, a company that complains about how NVIDIA will harm ARMs reputation as an independent business could end doing the exact same thing.
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pharma · Jul 8, 2021

Good read ...
Entner: Nvidia's Grace chip is immensely pivotal in $40B ARM buy | FierceElectronics
July 2, 2021

Nvidia announced during its GTC21 conference it is working on a new data center chip called Grace, after Rear Admiral Grace Hopper, one of the first computer programmers. The new chip would create a mesh of ARM-based CPUs with Nvidia GPUs and memory.

By connecting the CPU, GPU and memory via higher capacity lanes, the new chip design will be significantly more efficient than current x86 implementations where the connection between CPU and GPU has become the bottleneck. The 30-fold increase in Memory to GPU performance in Grace will significantly improve high-end AI computation in data centers and represents a massive shift in computational power as AI cores will spend less time waiting for data to arrive before processing it.
...
There are several challenges that Nvidia and ARM would have to overcome should the $40 billion merger proceed:

The majority of the server chip market uses custom-designed x86 chips with decades of close business relationships, development work by clients on x86, and the lack of a deep and well-known development platform. These types of relationships are hard to impossible to supplant

Some of the largest data center providers are building their own custom ARM chips based on their proprietary knowledge of workloads. Amazon, Microsoft Google, Facebook, Baidu, Alibaba and Huawei are all reportedly building their own data center ARM chips for their own data centers tailored to their specific and evolving needs. These data center providers need flexibility and value close interaction with core technology providers with their own in-house technology vendors.

The persistent lack of a native development platform. Even in this cloud-first, emulator-heavy world, developers like to develop on the same silicon as the computer they actually program on. This would require Nvidia to either build a computer that serves as a development platform or tightly integrate with Apple’s ARM-based computers. There is just the slight problem that Apple and ARM are not getting along very well. Nvidia has a long history of building systems (e.g., DGX, EGX, HGX) and could build a development platform. Recently they announced a partnership with Mediatek to enable Nvidia GPUs for Mediatek PC CPUs. Such a development platform could originate from a number of licensees if not Nvidia themselves.

Change of ARM from being design partner to being a component provider and potential competitor. With ARM being a technology provider that allows others to build chips as the company is a partner of these chipset manufacturers. With Nvidia being in the chipset provider business this relationship is fundamentally altered and due to competitive reasons, ARM will experience walls appearing where none had been before.

But Grace is not the only chip project where Nvidia combines its own technology with that of ARM. Nvidia is in the early phases of deploying Data Processing Units (DPUs) with friendly trial partners for a product called Bluefield-2. The chip combined the SmartNIC from Mellanox, a company that Nvidia acquired in 2020, a CPU by ARM, and an Nvidia GPU. In a year or two, all of these components could be delivered by Nvidia as an integrated solution. A combined Nvidia/ARM has the potential to integrate GPU, CPU, and Smart NIC, to a much greater degree than previously possible, creating a next-generation DPU.
...
Like so many things when it comes to anti-trust, the question and answer lies in how you define a market. If you look at the overall CPU market, it is huge and diversified. If you look at it more closely you see three segments with an overlay of AI: Mobile is dominated by ARM, the data center market is dominated by Intel, and the PC market is split 55/40/5 between Intel, AMD and ARM. Nobody really plays in all segments, which creates various perspectives and incentives:

The server space is heavily dominated by Intel with a custom design ARM segment from hyper scalers. Parties that want to bring competition to this segment would probably support Nvidia in order to get more investment and integration in this space.

In the PC space, ARM is the newcomer that is gaining share through Apple. AMD is also eating into Intel shares as Intel’s CPUs have not been as successful as they have been in the past. Companies like Apple who want to create their own silicon and not get coaxed into buying an integrated solution from a combined ARM and Nvidia would be very skeptical of such a combination

In the mobile space, ARM is the de facto standard and ARM has historically been very easy to work with. Any change is viewed with great skepticism and a likely negative outcome.

In the AI space, the only company that poses a viable threat to Nvidia is ARM. Nobody else comes close.

The reaction of the different companies who have publicly commented can be directly linked to where they play in the ecosphere. The new Nvdia with ARM would be the only player in all four segments.
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pharma · Aug 31, 2021

Tesla CEO Elon Musk Opposes Nvidia's $40B Acquisition of Arm. Here's Why. | Barron's (barrons.com)
August 30, 2021

Tesla might care about the outcome of this deal for a few reasons—some obvious and others not so obvious.

Tesla, for starters, is heavily investing in its autonomous driving technology. The computers that make self-driving car features possible have to process graphics. Nvidia also has autonomous driving capabilities and sells systems to other auto makers and suppliers. Tesla doesn’t want a key competitor to win. That’s one reason for opposing the deal.

Tesla is also an Arm customer, using its chips as part of its self-driving computer. If Nvidia buys Arm, Tesla might be forced to buy chips from a competitor. That’s another reason why Tesla might be upset.

Then, there is the changing structure of the chip industry.
“This deal would make a juggernaut,” said Wedbush analyst Dan Ives, pointing out that Tesla is investing more in developing its own computing power. “Now with Tesla in chip game Musk focused on it.”
Musk might not want to see others expand their technology platforms at a rate faster than his company.

Losing neutrality, along with creating a chip juggernaut, might be why the Arm acquisition has proved divisive. Microsoft (MSFT), and Alphabet (GOOGL), oppose the transaction, according to reports. Other companies such as Marvell (MRVL), Broadcom (AVGO), and MediaTek support it.

For the deal to go through, Nvidia needs approval from the U.S., the U.K., China, and the European Union. On Friday, Nvidia said it expected to seek approval from the European Union. Earlier this month, the U.K.’s Competition and Markets Authority said it had serious concerns about Nvidia’s plans, and called for an in-depth investigation into the transaction.
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pcchen · Aug 31, 2021

If Nvidia buys Arm, Tesla might be forced to buy chips from a competitor. That’s another reason why Tesla might be upset.
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This does not make sense at all. ARM does not sell chips at the moment. Even if NVIDIA buys ARM, NVIDIA is not able to "force" anyone to buy chips from them, as there are still many ARM licensees out there who would be happy to sell their chips.

Anyway, this deal is now viewed by most investors as dead in the water I guess. Personally if ARM is able to keep their independence then I'd say it's fine. ARM is not that essential for NVIDIA, nor does ARM really need NVIDIA's money for now (it's actually Softbank that needs the money, if I understand correctly).

nutball · Aug 31, 2021

pcchen said: ↑

nor does ARM really need NVIDIA's money for now (it's actually Softbank that needs the money, if I understand correctly).
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If Softbank own ARM and need the money, it's not ARMs decision to make surely?

MfA · Aug 31, 2021

ARM got incredibly lucky with Softbank, they might get lucky again ... or some private equity financial artist might load it down with debt and send it on a slow spiral into oblivion.

Deleted member 13524 · Aug 31, 2021

pcchen said: ↑

This does not make sense at all. ARM does not sell chips at the moment. Even if NVIDIA buys ARM, NVIDIA is not able to "force" anyone to buy chips from them, as there are still many ARM licensees out there who would be happy to sell their chips.
Click to expand...

I believe the writer in question doesn't really know the difference between chip, core or IP core design. Or perhaps he doesn't believe his audience is all that interested in knowing the difference so he simplified the terms.

entity279 · Aug 31, 2021

pcchen said: ↑

This does not make sense at all. ARM does not sell chips at the moment. Even if NVIDIA buys ARM, NVIDIA is not able to "force" anyone to buy chips from them, as there are still many ARM licensees out there who would be happy to sell their chips.
Click to expand...

Makes sense to me tho. I mean considering the high level view corporations like these have..
They would like ironclad guarantees that that the competition between ARM licencees is as fair as it could possibly be.

Automotive in particular; you cannot depend on a single suplier and if nvidia gets any advantage (real or perceived) they would at least become a "prefered" supplier. Hence the concept of multiple sources is under threat here, it's normal for companies to try to resist that.
Let's also remember that currently automotive is also taking a hit with the insufficient semi supply

JasonLD · Aug 31, 2021

Well, the funny thing is ARM probably needs Nvidia more than Nvidia needs ARM to gain relevance on the markets ARM is trying to expand.

trinibwoy · Aug 31, 2021

pcchen said: ↑

Anyway, this deal is now viewed by most investors as dead in the water I guess.
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Is it though? I'm pretty sure Nvidia's stock price will take a hit if/when this deal crashes and burns.

DegustatoR · Sep 1, 2021

JasonLD said: ↑

Well, the funny thing is ARM probably needs Nvidia more than Nvidia needs ARM to gain relevance on the markets ARM is trying to expand.
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I honestly don't know what's Nvidia's gain from buying Arm at all. The only thing I can think of are Arm's CPU engineers themselves which Nvidia can task with creating more CPUs like Grace. Beyond that Nvidia won't gain anything which they don't have already as a licensee.

pcchen · Sep 1, 2021

trinibwoy said: ↑

Is it though? I'm pretty sure Nvidia's stock price will take a hit if/when this deal crashes and burns.
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One may never know (until, of course, NVIDIA publicly abandoned the project), but from what I've seen it's probably already "priced in" by institutional investors.

Nvidia abandons deal to buy ARM spawn

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