Image: Arm

Last week, we published a story about how NVIDIA had shown interest in purchasing UK-based semiconductor and software design company Arm. That sounded like hot air at the time, but Bloomberg has followed up on its initial report with a new article that suggests green team is seriously considering an acquisition. In fact, a deal could be announced very soon.

“The two parties aim to reach a deal in the next few weeks, the people said, asking not to be identified because the information is private,” wrote Bloomberg. “Nvidia is the only suitor in concrete discussions with SoftBank, according to the people.”

“A deal for Arm could be the largest ever in the semiconductor industry, which has been consolidating in recent years as companies seek to diversify and add scale,” Bloomberg added. “But any deal with Nvidia, which is a customer of Arm, would likely trigger regulatory scrutiny as well as a wave of opposition from other users.”

If NVIDIA does follow through (and the regulators allow the company to get away with it), the price of the deal should be quite mind blowing. According to New Street Research LLP, Arm could be worth $44 billion if it pursues an initial public offering next year – a figure that’s expected to rise to $68 billion by 2025.

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13 Comments

  1. God help us all.
    Nvidia is a terrible terrible choice for this… **** Intel would be better, and I don’t like them at all. Apple would suck too. But I think Nvidia is the very worst.
    AMD would be better. Qualcomm would rip everyone in license fees, but would push to keep it wide spread regardless… Nothing a bit if suing and fines can adjust here and there.
  2. This is a bizarre move for Nvidia. The recent acquisition of the AI firm makes much more sense than going for ARM. With this they are signalling they want to get into the mobile space in a very big way; perhaps a way to get their graphics tech into mobile devices?
  3. This could be the beginning of a reduced influence by ARM.

    One of the major reasons ARM has been so successful over the last 20 years is because ARM Holdings has been completely neutral. If you want a license, they will sell you a license. Their goal is to make money off of licensing.

    Nvidia on the other hand is anything but Neutral. They have a long history of lock-outs, lock-ins, anti-competitive behavior. They haven’t been quite as bad as Intel has over the years in their abusive use of licenses and lawsuits. I could easily see an Nvidia owned ARM Holdings dangle a refusal to renew their license or something like that, as a negotiation tool to gain more out of the likes of Apple or Qualcomm. Brings a whole new meaning to the term being "strongARMed", heh.

    Forbes is on to this fact in their recent article:

    If Nvidia Buys Chipmaker Arm Holdings For $32 Billion From SoftBank, What Will Happen To Its Model Of Neutrality?

    The last thing the industry needs is another Intel duing everyone and everything in order to control their licenses, and lock others out of the market.

    I’m betting a whole lot of other ARM license holders are pretty concerned about this right now. A lot of companies like Apple and Amazon have a lot riding on this, and HUGE cash reserves to play with. It wouldn’t surprise me if one of them join in and make a defensive bid for the company.

    This whole scenario highlights why we should not have royalty laden instruction sets. It was bad for x86, and it is also bad for ARM.

    This whole situation is a huge incentive to get RISC-V up and going. Royalty Free is looking pretty good right now.

  4. From a technology perspective Nvidia has been missing the boat on income with their big deployments. Right now they have a licensing structure and deployment process for turn key video game hosting that clearly a few companies are using. They also have a relatively turn key solution for AI focused data center deployments.

    This will keep them from having to shell out millions in cash to buy AMD CPU’s or Intel CPU’s. More so for AMD because in effect they are funding their direct competitor. And especially if ARM isn’t beholden to AMD for licensing cpu technology.

    Here is what is going to end up happening. With ARM moving into the desktop and server compute environment in a very big way, Intel and AMD need to hedge them out of the market space and prevent them from gaining market share.

    And I think they have been doing that relatively successfully.

    BUT, ARM got a huge shot in the arm with the licensing deal to Apple. (And I bet that is a very rock solid and very long term license that Nvidia will want to destroy and burn to the ground just as soon as they can.)

    IF we see Nvidia building out turnkey enterprise level server solutions that are competitive in performance, cost less to run long term, AND perhaps get a sweetheart deal on licensing costs…. that will be a big boon to ARM. And as a wing of Nvidia, there is no reason for Nvidia to NOT to that.

    I know a bounced around a bit but I think those items all tie into the decision together. And I really think that AMD and Intel need to be watching what Nvidia does next. Because if they can get a solid CPU solution into their AI machines… with some powerful ASIC processors for additional high end compute boosting….

    Well that could spell trouble for AMD and Intel. (We’re kinda talking trouble in 2030 not the 2020’s.)

  5. I bet money the first thing Nvidia will do is shorten the terms of license renewal (however that is achieved, and within 5 years they will start snuffing out competition via way higher per chip license, and probably no general license of whatever sorts you can get now.. they will be making everyone an Nvidia chip producer or user one way or the other…. That is if we are lucky… At worse Nvidia will take in all of it, block out everyone as much as possible as soon as possible.. they will most likely move in a highly destructive fashion. Its really who they are… From a money standpoint alone, its a very smart move.. they will become an AI, plus GPU plus the equivalent of an Intel nearly overnight. I would value them at least 2x Intel.
    AMD might be the only company that keeps things nearly has is, and just enjoy the cash flow and call it a day. AMD can’t buy them of course.
  6. I think I would argue, thinking about it a bit more.. destroying ARM such as it is would be in fact the only outcome of Nvidia buying them…. Why would they invest billions if they knew then can create blowout ARM cpus that compete tremendously using current license practices, using the licenses they have? … So im thinking they can’t compete, so destroying and locking in is they way to go for big profit.
  7. nVidia already makes ARM SOCs (Tegra). So this aquisition would be purely about obtaining / controlling the other ARM licensees and patent revenue.
  8. It’s not like Nvidia destroyed 3dfx when they bought them…. oh wait…

    To be fair, 3DFX did a pretty good job of that themselves.

    Nvidia really just bought them for the patents, after the company had already failed.

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