nvidia buys arm; what re the consequences?

On 13 September 2020, NVIDIA announced that it will be acquiring Arm for $40 billion. As you might know, Arm is powering lots of devices including most smartphones, and its open-licensing policy and unrivaled performance at low power applications have attracted all kinds of customers worldwide. However, analysts are suggesting that this deal could be the Arm’s downfall thus it might also trigger a boost for Arm’s competitor, RISC-V.

NVIDIA and SoftBank had previously announced a definitive agreement under which NVIDIA would acquire Arm Limited from SoftBank in a transaction valued at $40 billion. NVIDIA aims to collaborate with Arm and expand their R&D in artificial intelligence applications. Furthermore, they profess to retain Arm’s business model and its headquarters in Cambridge, UK.

The deal is predicted to take 18 months to complete, as they have to secure regulatory approvals for the U.K., China, the European Union and the United States. There are concerns that Britain might not approve this deal in that NVIDIA’s policies about Arm, wouldn’t necessarily satisfy them. There is also China which has a high probability of rejecting the deal owing to the U.S.-China trade war.

NVIDIA is an American company which designs high performance GPUs for gaming, professional use, HPC and artificial intelligence.  In addition, they provide accelerators, embedded solutions and automotive solutions. Arm Ltd. on the other hand, is a semiconductor and software design company located in Cambridge, England. They design ARM processors, Mali GPUs, SoCs and software development tools. They have over 1000 partners and are powering 180 billion devices worldwide. Moreover, since 2016 The company has been owned by SoftBank Group. Both NVIDIA and Arm are pushing the boundaries of the world’s technology with top of the line solutions.

Recently a few semiconductor companies, among them Samsung, were keen to buy Arm, but NVIDIA stole the thunder and acquired Arm for a high stake of $40 billion. Meanwhile, the deal has reportedly alerted analysts, according to Mr. Chia, this deal would not only damage Arm, but also the industry and the consumers, just because NVIDIA wouldn’t be operating Arm as a totally independent company. This acquisition will grant NVIDIA control over Arm’s policies, licensing terms, fees and royalties, and therefore enables NVIDIA to destabilize Arm’s relations with its customers.

Arm is an essential part of the industry, therefore preserving its neutrality is of great importance. However, NVIDIA by gaining access to Arm’s confidential information would be able to access Arm’s upcoming designs and deploy them ahead of the competition. Furthermore, NVIDIA could also abuse Arm’s clients’ crucial information and gain unfair advantage over the competition.

Eventually in a few years NVIDIA could own Arm exclusively and make its ecosystem a deep pit that traps customers, just like CUDA. If you want to know about the bad reputation of NVIDIA’s policies you should ask Linus Torvalds. He is the founder and the maintainer of Linux and has worked with multiple big companies. In an interview back in 2012 at Aalto university, he literally showed his middle finger to NVIDIA due to their atrocious behavior.

“NVIDIA has been one of the worst trouble spots we’ve had with hardware manufacturers, and that is really sad because NVIDIA tries to sell chips, alot of chips, into the android market, and nvidia has been the single worst company we’ve ever dealt with, so NVIDIA f_ck you.”

Linus Torvalds, Aalto Talks, 14 June 2012

NVIDIA, by owning Arm would be able to disrupt the entire industry with a single shot, and promote its own legacy too. That’s in fact what a wise man would do for his own company despite the fact that it could be bad for the industry and us. Talking about NVIDIA’s benefits, they will probably shift resources towards data centers and AI as profits from smartphone and embedded markets are not desirable.

arm's grave stone

An image demonstrating Arm’s death because of the deal. Source: Underfox

This shift in the industry would probably alert Arm’s customers. As they wouldn’t want their leash in NVIDIA’s hands. Consequently, they would choose a plan B to employ it when things go sideways with Arm. Analysts believe that RISC-V could be a plan B for them. It is an instruction set architecture (ISA) but, however, unlike others this ISA is provided under open source licenses and therefore doesn’t require fees. Several companies provide RISC-V hardware, Linux has support for it and it is supported in popular software development tools.

Moreover according to Yann LeCun, Facebook’s chief AI scientist and inventor of the Convolutional Neural Network (CNN), due to acquisition of Arm by NVIDIA, industry will move to RISC-V as it is a promising alternative to Arm’s solutions.

“There is a change in the industry and ARM with NVIDIA makes people uneasy but the emergence of RISC-V sees chips with a RISC-V core and an NPU (neural processing unit). These are incredibly cheap, less than $10, with many out of China, and these will become ubiquitous. I’m wondering if RISC-V will take over the world there.”

Yann LeCun, eeNews, 15 October 2020

Here is also another analyst who believes RISC-V will be replacing Arm:

Codeplay Software Limited has recently announced that they will be joining and bringing their tools to RISC-V foundation. Codeplay produces software tools and is a contributing member of the Multicore Association, the Khronos Group, and the HSA Foundation. Therefore, This move will be a huge leap forward for RISC-V and is a result of NVIDIA’s acquisition of Arm.

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