Nvidia prepares to abandon $40B Arm bid

https://www.bloomberg.com/news/articles/2022-01-25/nvidia-is-said-to-quietly-prepare-to-abandon-takeover-of-arm

by pseudolus • 4 years ago

784 453 4 years ago

bloomberg.com

tester7562• 4 years ago

is this state slowing technological advancement

actually state protecting it?

no_time• 4 years ago

advancement for the sake of advancement is not something to celebrate. I can't imagine a situation where more consolidation in this space is something beneficial for anyone except the company doing the acquisition.

tester7562• 4 years ago

that's good point, naive of me.

dogma11388• 4 years ago

Probably a mixture of both, I think NVIDIA had a chance to push ARM to new heights it would also have forced them to be far more open.

Longer term the market might be in a better position with a public ARM.

I think a lot of the concerns around NVIDIA were driven by hyperbolic statements and memes.

ARM is a good example of a monumental success and relative failure as in their cores and their architecture is in everything but they never have been able to capitalize on their success at the same scale at least as far as it goes for converting it into revenue which sits only at around $2B per year.

NVIDIA on the other hand has mastered capitalizing on every success no matter how small it is.

Overall as acquisitions go on paper it was a good match. It would’ve given ARM access to a lot of capital, engineering resources and a driven management with a strategic vision.

NVIDIA would’ve gotten the ability to set the path for one of the most commonly used CPU architecture and being able to offer a completely vertically integrated solution to both enterprise and end consumers.

Arguably NVIDIA could achieve the latter on its own too at least by licensing ARM I do think it’s a shame that they don’t have an x86 license too. ARM on the other hand would need to undergo a massive change to get into the position they arguably deserve to be in.

trasz• 4 years ago

they never have been able to capitalize on their success

As in, they failed to destroy the company for short term gains, like companies usually do.

justinclift2• 4 years ago

... revenue which sits only at around $2B per year.

Err... plenty of places would be happy to have $2B revenue per year. ;)

throw0101a• 4 years ago

ARM is a good example of a monumental success and relative failure as in their cores and their architecture is in everything but they never have been able to capitalize on their success at the same scale at least as far as it goes for converting it into revenue which sits only at around $2B per year.

ARM got to where it is by not being too greedy. If others perceived them to be making power grab then a lot fewer people would have been willing to stake their own futures on the architecture.

To mix metaphors, ARM went with a 'rising tides floats all boats' approach to grow the pie in general instead of just their own slice of it.

mschuster913• 4 years ago

Probably a mixture of both, I think NVIDIA had a chance to push ARM to new heights it would also have forced them to be far more open.

No way. Even losing the most popular electronics brand (Apple) didn't sway NVIDIA from its course.

ARM on the other hand would need to undergo a massive change to get into the position they arguably deserve to be in.

Intel has completely botched the last six-ish years, and Apple proved that ARM-based processors cannot just compete with Intel's offerings but outright destroy them, while still keeping backwards compatibility. All that ARM (as an architecture) needs now is Microsoft also offering ARM support and runtime emulation in Windows and a CPU vendor willing to sell decently powerful chips to vendors... and then, snap, Intel is gone.

lonelyasacloud• 4 years ago

On balance, protecting.

When ARM was bought by SoftBank the main argument for it being acceptable was that SoftBank were not chip manufacturers in their own right. And that because of this, ARM would have every incentive to carry on treating all of ARM's existing customers reasonably fairly under SoftBank's ownership.

That's obviously not the case with Nvidia.

So while, it's possible to imagine that Nvidia wouldn't (at least initially) abuse any ownership of ARM. From a societal pov, why risk allowing a situation that relies on humans behaving well on an ongoing basis not to fail? And two, given the way ARM operates i.e. all customer $$$'s are equal, why would Nvidia bother if they didn't think there was an advantage?

pseudolus• 4 years ago

Link to the Bloomberg source story with more details:

https://www.bloomberg.com/news/articles/2022-01-25/nvidia-is...

justinclift2• 4 years ago

Wonder if this means Nvidia will jump on the RISC-V bandwagon instead?

dannyw• 4 years ago

No chance. Nvidia will invent their own proprietary standard.

msk-lywenn• 4 years ago

Looks like they are already using RISC-V: https://riscv.org/wp-content/uploads/2017/05/Tue1345pm-NVIDI...

kelnos2• 4 years ago

I would doubt it. They already use both ARM and RISC-V in their products, why would they invent a new ISA? That's not a trivial thing to do, and it doesn't seem worth their time.

IceWreck• 4 years ago

Developing your own instruction set and getting all compilers to work with it is a pain and very expensive compared to adopting an up and coming open standard.

baq• 4 years ago

they'll combine the worst of both approaches: pretend to use an open standard and establish extensions that will become de facto standard, like CUDA.

dkjaudyeqooe• 4 years ago

A new proprietary standard is DOA in today's environment. No one wants to be locked in to that.

maxwell865• 4 years ago

Wonder if this means Nvidia will jump on the RISC-V bandwagon instead?

Nvidia is a big contributor to the RISC-V standard, all Nvidia GPUs have had RISC-V chips in them for many years, etc.

So no need to wonder, this already happened, many years ago.

stabbles• 4 years ago

What will this mean for NVIDIA's Arm based Grace CPU?

jonwinstanley• 4 years ago

The licensing deal is most likely completely separate, but agree that it adds some uncertainty to the relationship

d3mon3• 4 years ago

Nothing. They will continue developing their own CPUs. https://www.extremetech.com/computing/330671-nvidia-announce...

JiNCMG2• 4 years ago

Nothing. NVidia still has it's ARM license and as long as they are kept out of the x86 chip business (thanks to Intel and AMD) they are happy to renew the license with ARM.

d3mon3• 4 years ago

Plenty of headwinds for Nvidia have emerged recently: -Declining crypto -Dead arm acquisition -Increasingly competitive amd /Intel GPUs (both integrated and discrete) -Rising tsmc wafer prices

trollied• 4 years ago

I couldn't help but read your -D and -I things as compiler flags....

sgerenser• 4 years ago

-DACQUIRE_ARM=0

throw_m239339• 4 years ago

LOL me too, maven CLI arguments...

marcosdumay• 4 years ago

Yeah, and the unescaped spaces really destroyed it.

terafo2• 4 years ago

AMD is increasingly competitive, but still doesn't have good software compatibility outside of gaming. GPUs are not the priority for them. They basically make 10 times less cards and aren't going to make more. Which is sad since we need more competition. Rising TSMC prices aren't as big of a deal for them since they are mostly on samsung right now.

I wouldn't say that things are so bad for Nvidia. They are selling more cards than ever, their "Ultimate Play" to rise the prices across the board will, most likely, be successful in the long run. Sub 200 dollars segment is dead, like sub 100 before it. Since they are going to make monstrous MCM GPUs, the price for an absolute high end is going to rise to unseen heights(performance will rise with them). I hope Intel will stop this madness eventually, but they won't be able to do it fast, even if they try as hard as they can.

ColinWright• 4 years ago

Dupe: https://news.ycombinator.com/item?id=30070289

Comments both there and here.

d3mon3• 4 years ago

Related : NVIDIA setting up cpu R&D team in Israel https://www.extremetech.com/computing/330671-nvidia-announce...

eatbitseveryday• 4 years ago

Just like Intel has it

irthomasthomas• 4 years ago

May be related to Arm China going rogue? [0] It is starting to look like Britain's sale of Arm was a good deal after all. Foisted!

[0] https://news.ycombinator.com/item?id=28329731

zinekeller• 4 years ago

No, that didn't deter Nvidia, it's mainly with EU, UK and American regulatory pressures (which might formally stop the acquisition). Additionally, some civil servants within the UK government have said that the ministers are considering to declare Arm as a critical company (and considering the "partygate" has made the Johnson government more populist, it's becoming more likely that pro-Britain moves will be made, at least as perceived by voters).

nivenkos• 4 years ago

But ARM was already sold to SoftBank (Japanese). It's not like it's still Acorn producing British microcomputers...

meepmorp• 4 years ago

The US FTC sued to block the merger, in December.

https://www.ftc.gov/news-events/press-releases/2021/12/ftc-s...

giuliomagnifico• 4 years ago

I don't think it's a neither a good nor bad news, actual owner -Softbank- is not the best for ARM, but also ARM-AMD could make almost a monopoly in the GPU market.

Dah00n4• 4 years ago

In the GPU market? I doubt Nvidia sees it that way with its current share of 83%

cpncrunch• 4 years ago

Non paywall version?

yrro• 4 years ago

Relevant parts:

Nvidia Corp. is quietly preparing to abandon its purchase of Arm Ltd. from SoftBank Group Corp. after making little to no progress in winning approval for the $40 billion chip deal, according to people familiar with the matter.
Nvidia has told partners that it doesn’t expect the transaction to close, according to one person, who asked not to be identified because the discussions are private. SoftBank, meanwhile, is stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover, another person said.
The U.S. Federal Trade Commission sued to stop the transaction in December, arguing that Nvidia would become too powerful if it gained control over Arm’s chip designs.
The acquisition also faces resistance in China, where authorities are inclined to block the takeover if it wins approvals elsewhere, according to one person. But they don’t expect it to get that far.
Both Nvidia and Arm’s leadership are still pleading their case to regulators, according to the people, and no final decisions have been made.

metahost• 4 years ago

Here you go: https://archive.fo/NEg6u

MangoCoffee• 4 years ago

China for one won't approve the deal. China is feeling the squeezes of tech cut off. only 3 companies is allowed to make x86. RISC-V is not there yet. the only option left is ARM. huawei's hisilicon was designing top notch ARM cpu for huawei's phone. ARM is just too important for China.

scrubs4• 4 years ago

Since when do I care what China thinks? Frankly, it wouldn't kill for global trade (where the west is concerned) to swing back 15-20 deg to more autonomy. To zero? Madness; just a correction.

The salad years of buying almost anything at Walmart, Tesco, Amazon for 15% less than what it'd cost from the west and taking that to the hoop as success are long gone.

The low fruit is increasingly picked for them too. They can't do cheap labor 24/7/365 forever just like we can't do cheap prices for ever. Eventually we'll both need to rebalance price, jobs, security, and so on.

ChrisLomont3• 4 years ago

The salad years of buying almost anything at Walmart, Tesco, Amazon for 15% less than what it'd cost from the west and taking that to the hoop as success are long gone.

Not according to the vast majority of consumers. Look what trouble far less than a 15% rise in costs due to inflation is doing to consumers.

They can't do cheap labor 24/7/365 forever

The west cannot do expensive labor forever. It's dying faster than cheap labor.

Dah00n4• 4 years ago

They can't do cheap labor 24/7/365 forever

Yes and no. China can't, no, but history tells us exactly what will happen. Japan used to be the "cheap and crappy electronics maker". At some point the population has been lifted enough that some other poor country will take over the bottom jobs. Likely somewhere in Africa. It is not as if China at some point will start to fall back to where it once were and even if it did all it would do would be to hold the production in China instead of the next country.

Eventually we'll both need to rebalance price, jobs, security, and so on.

That will never happen.

monocasa12• 4 years ago

They can't do cheap labor 24/7/365 forever

They're already adjusting their economy. The cheap labor is now found in the rest of SE Asia with east Africa viewed as growth potential for cheap labor by the Chinese.

fomine32• 4 years ago

There are also original HPC chips.

https://www.hpcwire.com/2021/11/24/three-chinese-exascale-sy...

lewisjoe• 4 years ago

Quick summary on why it matters that Nvidia abandons ARM takeover:

1. ARM doesn't own any factories. Its entire workforce publishes blueprints for making chips (like a software company where the entire asset is intellectual)

2. Buying this type of intellectual asset, means owning and controlling a technology.

3. This also means, all the other customers who depend on this tech (Apple, Samsung, Amazon, pretty much all big tech companies) are now at a disadvantage with NVIDIA as a competitor.

4. China heavily depends on ARM (Huawei, the company's biggest tech manufacturer rely on ARM)

5. This means, the after ARM gets owned by a US company, the US can possibly just cut-off ARM supply to China

6. Since ARM is basically like a software company, it's better to not be owned by a hardware maker. That way, it can prioritize demand from several hardware makers instead of being directed to cater to one market)

So, all-in-all this is a good thing :)

londons_explore3• 4 years ago

This means, the after ARM gets owned by a US company, the US can possibly just cut-off ARM supply to China

But IP is very hard to control the supply of, especially one like this where hundreds of companies have a copy of the IP. If the US won't license it on fair terms, China will just stop enforcing IP laws and allow anyone to copy it for free.

criley2• 4 years ago

With all due respect to China, licensing on fair terms has never been a requirement for state-sponsored intellectual property theft.

bennysomething• 4 years ago

But goods infringing IP can presumably be prevented from import into western markets?

ayende• 4 years ago

Except that the response would be that any product with that IP will be banned from EU/USA. That is a huge hit to take.

jsiepkes• 4 years ago

5. This means, the after ARM gets owned by a US company, the US can possibly just cut-off ARM supply to China

China has already hijacked the ARM branch in China[1] and taken over ARM's IP.

[1] https://semianalysis.com/the-semiconductor-heist-of-the-cent...

greatpatton• 4 years ago

Seems that it's not as simple as mentioned here: https://www.extremetech.com/computing/326617-arm-refutes-acc...

ssl232• 4 years ago

On the topic of China and IP, I watched an interesting debate on China between two politicians recently: https://www.youtube.com/watch?v=nEchkn3unl8. Funnily Vince Cable, arguing in favour of China as a friend to the West, defended their IP offences saying this is what lots of Western nations did to each other (and, arguably, though he doesn't make a big deal of it, China) on the way to becoming fully developed.

imron3• 4 years ago

This means, the after ARM gets owned by a US company, the US can possibly just cut-off ARM supply to China

Good thing ARM China already decided to go its own way [0].

0: https://semianalysis.substack.com/p/the-semiconductor-heist-...

option_greek• 4 years ago

Wow that's an interesting read. So anyone who holds a rubber stamp of a company can steal the whole company? That's some screwed up legal system.

fennecfoxen2• 4 years ago

I am an NVIDIA employee in an unrelated part of the business and not inclined to comment in depth on these matters and this is not an NVIDIA opinion or official but

i thought it worth mentioning

I don’t see the distinction? NVIDIA is fabless too??

(Heck, so is AMD I think)

fredoralive2• 4 years ago

Nvidia doesn't licence its designs to other companies for incorporation into their own chip designs, ARM does. That is the main distinction I think, and why people want it to be a neutral third party.

uxp1005• 4 years ago

AMD spun their manufacturing off as Global Foundries, so yes.

And yeah, I’m not sure this distinction the poster is making between arm as like a software company and NVIDIA like a hardware company makes much sense.

Arm makes IP (in the chip design sense). NVIDIA makes IP and combines it with IP from Arm and others, and produces some product designs based on the chip, which NVIDIA tests and writes software for. But ODMs make the products and fabs make the chips. I really don’t think calling some of this like software and some like hardware is very explanatory, at least partially because NVIDIA writes a lot of software, and because I think the person reading that description might come away with the impression that arm just produces the architecture, and not actual core designs (which NVIDIA, Denver aside, uses).

ChuckNorris893• 4 years ago

Since ARM is basically like a software company

It's is not. Being a fabless designer of hardware IP doesn't make them "basically a SW company".

It's still very much a HW IP company any way you slice it.

ChrisRR• 4 years ago

People understand software better than they under HDL designs. To most people, they're pretty comparable

yccs27• 4 years ago

Software and hardware IP companies are indeed not the same, so we should be more precise about the ways in which they are similar.

* Their work is in both cases a mix of design and engineering.

* Both produce goods that are reproducible at zero cost, and are protected (only) by intellectual property laws.

So while ARM definitely does not produce software, their work is somewhat comparable.

jakeinspace• 4 years ago

It's an analogy.

Nokinside5• 4 years ago

There are significant inaccuracies in this take

(2) "controlling tech" All big players: Apple, Nvidia, Samsung, Amazon, Qualcomm, Intel, .. have so called Architectural license with heavily crafted clauses in them that make them free from Arm control except for some minor details. They use just the instruction set and make their own microarchitecture.

(3) Arm China was robbed from Arm. The CEO stopped taking orders and just kept IP and is running company like their own. Chinese courts did nothing. China does what it wants inside China.

(5) No difference. There are too many cross-atlantic IP and design tool connections. Arm must comply completely to US government sanctions.

(6) Just like Nvidia. Both fabless hw IP companies. Difference is that Nvidia sells chips, Arm sells IP. Nvidia wanted Arm because they want to sell Nvidia IP to others. Nvidia has Arm architecture license, they don't need Arm IP to use Arm.

A_non_e-moose• 4 years ago

(3) Firstly, Arm China was robbed from Arm. The CEO stopped taking orders and just kept IP and is running company like their own. Chinese courts did nothing. China does what it wants inside China.

Did ARM cut off any new IP access from ARM China? Seems like a logical next step. And how is ARM China going to continue innovating? On their own?

uluyol3• 4 years ago

(2) is untrue. Most players use ARM core designs, not just the instruction set.

Qualcomm used to make their own (back in 2014 or so) but hasn't since. Samsung tried after and quit in 2019. The cloud cores are all standard ARM designs (neoverse).

Coding_Cat• 4 years ago

Chinese courts did nothing. China does what it wants inside China.

Lots of people calling this out as 'a bad thing', but at the end of the day the Chinese government/courts handled in what it thought was in the best interest of Chinese citizens.

For other countries that might look like respecting IP clauses but for China it doesn't seem to be. I think it makes perfect sense and is perfectly moral for a country to do so.

and for 6) I think one of the fears there is that nVidia would use ARMs near de-facto monopoly to force their tech onto the market and push out competitors, like qualcom on the mobile GPU market.

Whether it be trough integrating nVidia tech more deeply into the architectural offerings essentialy forcing competitors to license both techs, or by using the ARM IP to in the future outcompete direct competitors by charging more for the IP that they can now use without any cost. Even if they're not planning any of that, I think the fear that they might in the future is what's giving many people (and regulators) pause.

ARM itself is never in direct competition with its customers _because_ it only sells IP, nVidia sells chips and is in direct competition with others who depend upon ARM for their chips.

conradev• 4 years ago

“They use just the instruction set and make their own microarchitecture.”

Is that really the case? My understanding is that while, yes, they make their own microarchitectures, they rely heavily on IP from ARM to make that happen

Do they write their own instruction decoders, FPUs, etc? I thought they started with the reference designs for a core and then tweaked them to their liking, some companies tweaking more than others

A peek inside Qualcomm’s upcoming chips, for example: https://www.anandtech.com/show/17091/qualcomm-announces-snap...

All of the main cores are ARM reference designs. Qualcomm does add proprietary IP, but it is more oriented around their strengths, like integrating their 5G modem into the die, which is something that none of the other big chip manufacturers can do at the moment (to my knowledge)

Aissen3• 4 years ago

(3) Arm is refuting that there was IP theft, see https://www.extremetech.com/computing/326617-arm-refutes-acc...

stjohnswarts2• 4 years ago

(2) *I thought Apple had complete control over their Arm(TM) based chips as in they can do anythign they want and pay no licensing fee as long as they keep the Arm branding?

Melatonic5• 4 years ago

Point 3: New New internet!

newsclues• 4 years ago

Your points 1 and 6 seem to conflict.

NVIDIA isn’t a hardware manufacturer.

xaxaxb• 4 years ago

There should be quick summaries for all posts like this. +1

uxp1005• 4 years ago

This summary is not very good. Not wrong, but misleading I guess? Seems sort of confused about how arm and fabless semiconductor companies interact?

mytailorisrich• 4 years ago

Arm is a British company, currently owned by Softbank, a Japanese company.

This means that in practice the US can already cut off supply to China.

See for example ASML: they are a Dutch company. So the US government only needed a friendly word with the Dutch government for the Dutch government to ban ASML from exporting certain advanced processes to China.

For the British government I'm sure there would be no need to call... A text would suffice ;)

(leaving aside all the drama with ARM China already because of those issues...)

_joel• 4 years ago

The best way to get the UK government's attention is to write it on a birthday cake.

C19is20• 4 years ago

'friendly word'.

syspec• 4 years ago

I think it's a little more than that.

If I recall correctly the parents used by ASML are owned by the US military so the US is part owner of the company -

na85• 4 years ago

5 at least is a non factor since the Chinese government doesn't play by the rules of intellectual property anyway.

UncleOxidant• 4 years ago

Why don't the ARM users form a consortium to own ARM?

ginko• 4 years ago

Qualcomm did suggest that: https://www.cnbc.com/2021/06/14/qualcomm-offers-to-invest-in...

londons_explore3• 4 years ago

With an increasing number of countries worldwide using their powers to prevent the sale or merger of companies, will we see a devaluation of these companies? After all, owning something is only of value if you can sell it, and if you can only sell with permission from 10+ country governments, all of whom can say no for strategic reasons, then it isn't such a great purchase.

neolefty3• 4 years ago

Good point from a global view. I'd like to see a little more international cooperation, leading towards a global standard, but we have many hurdles between here and there, especially involving trust between nations.

anotherman5542• 4 years ago

Owning a company is traditionally thought to be of value because you get a stream of dividend income from the profits the company earns, not because you can sell the company.

paulmd5• 4 years ago

what? no. assets/IP have always been highly valued and certainly not on the sole basis of their cost-to-replicate.

(and if you can't sell assets, that's the only valid metric for valuation - "I need that thing and would have built it anyway". Even if it's complimentary to your existing business - the BATNA is "build it myself".)

extremely controversial (if not outright incorrect) statement to be labeling as "traditional wisdom". Says who?Probably not any economics textbook written in the last century.

klelatti11• 4 years ago

Only two weeks ago SoftBank / Arm / Nvidia made a submission to the UK competition authorities with a singularly pessimistic view of Arm’s prospects as a stand-alone company [1]. I wonder if this was wise given the where the deal seems to be now.

Whilst this is a bit overdone, it does highlight the challenges that Arm faces. If the Nvidia deal is dead - which seems likely - then floating clearly seems unlikely to offer the prospect of the return that SoftBank was expecting when it paid a premium for Arm.

The key question from an Arm user / customer’s perspective seems to be ‘Can Arm as a stand-alone company finance the investment it meets to stay competitive?’

[1] https://assets.publishing.service.gov.uk/media/61d81a458fa8f...

varelse• 4 years ago

Likely Qualcomm bales them out as they have offered to do so and eventually takes them over quietly by osmosis so no one notices until the deal is done.

https://www.barrons.com/articles/qualcomm-offers-to-rescue-a...

3102602• 4 years ago

From that document:

As Arm’s CEO, Simon Segars, explained: “We contemplated an IPO but determined
that the pressure to deliver short-term revenue growth and profitability would
suffocate our ability to invest, expand, move fast and innovate.”

It sounds like Arm needs a change in leadership to me. Find the capital for long-term investment somewhere and follow a path to improvement like AMD did. Yes, there is pressure to deliver short term profit as there always is today. However, that's not a strategy that works for a company like Arm. Everyone around the world can see the value in what Arm produces. Find someone to invest who isn't a hedge fund manager and still sees that value.

michelb• 4 years ago

Doesn't Softbank need their money back? ARM most likely has to IPO whether they like it or not, right?

nemothekid• 4 years ago

Find the capital for long-term investment somewhere and follow a path to improvement like AMD did.

They did, it was called SoftBank and now SoftBank needs its money back. The comparison to AMD isn’t comparable; AMD already had a high margin business in a proven market; it’s unclear what ARM is going to be pressured to do; either they will have to put the screws on their licensors or start making their own chips (which would be no different from the concern under nvidia)

neolefty3• 4 years ago

Is this about market fundamentals? One way to think about ARM is as a vehicle for R&D, shared amongs competitors such as Apple, Qualcomm, Samsung, and Huawei.

* Do they each benefit from the R&D done by ARM?

* Is that benefit enough to be worth the cost, even shared amongst the recipients?

* Can they "agree" on an arrangement, and can ARM function well enough to stay healthy?

monocasa12• 4 years ago

That argument made negative sense to me. 'Don't IPO because public companies are inherently limited to short term growth, therefore we have to be bought by an already public company?'

klelatti11• 4 years ago

We have to distinguish between value created in the Arm ecosystem (a lot) and how much Arm retains (much less).

Nonetheless Arm seemed to do OK as a public company for 25 years but Son thought he saw an opportunity and paid a big premium for it.

I do think there is an issue around Arm as a relatively small player competing for talent with Apple, Intel etc which feels suboptimal for the industry as a whole. Perhaps eg the cloud hyperscalers could jointly and directly fund development of server chips in the same way that firms prepay TSMC for capacity.

johnmarcus• 4 years ago

are we pretending that they didn't say that exclusively in hopes the deal would go through?

They will turn around that statement on a dime and not a single investor will blink with "...but you said to the regulators...". No risk in making such a silly statement.

They probably will get a change of leadership though. Often they chose the best-man-for-the-merger, and when it doesn't work out, they then actually search for the best-person-for-the-job.

karmasimida• 4 years ago

SoftBank / Arm / Nvidia made a submission to the UK competition authorities with a singularly pessimistic view of Arm’s prospects as a stand-alone company

They apparently want to sell the company and benefit from it together ... so it this surprising?

klelatti11• 4 years ago

Surprising when it seems clear it will be blocked and they will have to float Arm!

syadegari• 4 years ago

Does anyone know why they decided to go for buying Arm in the first place? If they needed tight integration with their GPUs and wanted to move away from x-86, can't they come up with Arm-based solutions like Apple did?

bayindirh2• 4 years ago

nVidia is trying to become a full-stack company.

They have GPUs. Got network capabilities with Mellanox. Add ARM knowledge on top and you have a complete platform building capability.

TL;DR: nVidia just wants to dominate the whole stack. Like Apple, but for data center / scientific / AI / HPC, etc.

fennecfoxen2• 4 years ago

I am an NVIDIA employee in a niche of the HPC business. This is not an NVIDIA official opinion.

HPC is nice, but when you hear Jensen getting really excited, it’s not about dominating some niche like that, it’s about a vision of the shiny sci-fi high tech future, and actually delivering the tech to make it real.

So don’t just look at HPC to understand the NVIDIA ambition. Start at edge computing; imagine a world with ubiquitous autonomous robots (cars and drones and otherwise). Think of the onboard chips driving their vision and speech recognition models: That’s a great place for ARM and NVIDIA chips together, whether as one company or two. Watch a recent keynote and see how all the rest of the tech fits into place as part of that: 5G signal processing chips, for instance, something you might gloss over if you’re not in telecom. You don’t need a roadmap to see how it is all connected in support of this world of the future.

(I certainly don’t have the roadmap, either, I just watch the keynotes and help shuffle bits.)

foobiekr2• 4 years ago

At least in the networking side, nvidia’s HW merchant silicon nature is quite evident. They have a very marginal SW stack (at this point still trying to beat the dead horse of cumulus and doing the weakest of investment in Sonic) and basically nothing at all meaningful beyond that. They keep approaching friends trying to sell their ToRs but it’s not happening outside of HPC.

They seemingly don’t see any value in SW. architectures like end-to-end designs (DPU->Network->DPU->pcie) can be great but without SW to make them consumable it’s doa outside of dedicated clusters.

chrisjc• 4 years ago

Yes, I imagine they could. I wonder if they acted out of fear that someone would come along and gobble up ARM and do them what everyone is now scared of Nvidia doing to everyone else.

Now the question is, who will that "someone" be next? What kind of suitor is fit for ARM?

The curse of ARM being so successful and incredibly crucial to many pervasive industries, yet seemingly unable to go it alone.

maxwell865• 4 years ago

I always assumed NVIDIA wanted to license IP through Arm just like Arm does.

Traster2• 4 years ago

Nvidia absolutely could come up with their own ARM-based solutions like Apple did. Guess where all the people who know how to do that work? Arm. If nothing else, Arm offers a great engineering team to accelerate Nvidia's plans and it also means Nvidia can push new ideas into the latest ISAs much easier. A similar thing happened a few years ago with Imagination Technologies who produced Apple's GPU IP. Except instead of Apple buying them, Apple built an office next door and poached the entire engineering team. Leaving ImgTec as a deeply scarred company that eventually got sliced up and sold off.

monocasa12• 4 years ago

Nvidia has their own totally custom ARM cores. That team was leftovers from Transmeta.

gigatexal• 4 years ago

Huzzah! Good. Keep ARM free to sell its IP to all.

bibinou• 4 years ago

Does Apple still rely on ARM?

fredoralive2• 4 years ago

Apple's chips implement ARM ISAs, although Apple creates their own implementations rather than licence ARM's own core designs. How much this affects them depends on the licensing agreements between ARM and Apple, which only they know about, although Apple apparently have a favourable deal. They didn't publicly seem phased by the idea of Nvidia owning ARM, anyway.

mdasen3• 4 years ago

The ARM deal would have impacted all other ARM licensees a lot more than Apple. As you note, Apple is making custom cores so they don't need ARM's reference designs.

For example, Google's Tensor processor in the Pixel 6 uses ARM Cortex-X1, Cortex-A76, and Cortex-A55 cores and ARM's Mali GPU. They add some ML cores to the design, but the CPU/GPU is really designed by ARM. Apple, on the other hand, makes its own internally designed cores for its processors rather than using ARM's designs.

While you're right that the general public doesn't know ARM/Apple's deal, we do know that ARM offers a perpetual ISA license. Even if Nvidia bought ARM, Apple could still make current ISA processors forever (it seems unrealistic to think they don't have a perpetual license). While Nvidia might not want to help Apple, it would be in Nvidia's interest to offer new ISAs to Apple at reasonable rates because a) one probably doesn't need updates to the ARM ISA at this point b) Apple not getting on board with a new ISA could impact the rest of the industry getting on board with it given that Apple is so large (and respected) c) Apple puts a lot of time and money into LLVM and having them against an update to the ARM ISA would (at the very least) mean that there wasn't free labor (from Nvidia's perspective) adding compiler support for the ISA update.

It's true that we don't know all the details about deals between Apple and ARM, but at this point it seems like Apple doesn't really need ARM. Samsung, Google, Amazon, and others use ARM's reference designs. If ARM disappeared, they wouldn't get updated cores and would have to build up in-house design teams. If ARM disappeared, Apple would just keep on making new designs. I think Qualcomm is looking to go more custom in the future as they bought Nuvia and are looking to make inroads into things like laptops over the next few years.

In some ways, it seems like ARM getting bought by Nvidia would be good for Apple. If Nvidia becomes really harsh for third-party licensees, it could mean a few years where the costs skyrocket in the Android ecosystem while their costs remain the same. Even after that, it might lower the number of manufacturers for ARM processors. Would MediaTek spin up a custom-design shop? Would Samsung? Maybe, but it would add a lot of cost over re-using reference designs.

Apple isn't really reliant on ARM for anything at this point. The rest of the industry is pretty reliant on ARM's reference designs. If Nvidia ownership meant that those reference designs went up in cost or if Nvidia wanted its best work to go into Nvidia processors and put out weak updates, that would benefit Apple with Android manufacturers scrambling to figure out what to do: buy expensive Nvidia processors, ship weaker updates, invest in the custom-core route?

JiNCMG2• 4 years ago

Yes but Apple's license for ARM v7 allows it to do anything it wants with the tech regardless of who owns ARM. Only 5 to 7 companies have this license and it's very expensive.

saagarjha• 4 years ago

Apple also has a license for ARMv8.

maxwell865• 4 years ago

No

Arm and Softbank said so much last week.

Arm does not take profits from Apple CPUs.

TradingPlaces• 4 years ago

This was never going to happen. US, UK, China and EU all have regulatory leverage, and they were about to go 0-4

PaulHoule• 4 years ago

It’s a bigger story for SoftBank than it is for NVIDIA. NVIDIA can do OK without ARM, but for SoftBank it was a way to be able to pay redemptions for the failing Vision Fund.

Back in the day a Japanese businessman who screwed up the way Son did would find a knife in their room and know what they were supposed to do with it. The ARM deal took the pressure off but it is back on again.

sealeck• 4 years ago

I really don't think suggesting that Son should commit ritual suicide is an appropriate comment to make.

nixass• 4 years ago

Now Microsoft and Activision-Blizzard

johnebgd• 4 years ago

Doing what they always do, stealing without repercussions from innovators around the world.

Nokinside5• 4 years ago

You are correct, but I dislike the tone that what they do is "typically Chinese" or what Chinese do.

* When Chinese were ahead, European stole and smuggled manufacturing technologies from China.

* Industrial revolution in the United States was started by ruthlessly stealing the British innovations. Samuel Slater -- the "Father of the American Industrial Revolution" -- is known as "Slater the Traitor" in Britain.

* Japanese stole and copied every design and technology from the US and Europe they could from the start of Meiji era 1868- to 1960s.

Piracy is not a theft in a sense that it's just illegal, not fundamentally immoral. I think it's actually cool historical constant that moves the world ahead.

patrickk• 4 years ago

Chinese price dumping from state-sponsored companies also largely wiped out the German solar PV industry[1,2]. Germany was an early innovator in solar, especially in regards to inventing the concept of a feed in tariff when solar PV was still hideously expensive, thereby driving wider adoption. Planet Money did a nice podcast on the history of it [3].

[1] https://www.dw.com/en/chinese-exports-crushing-german-solar-...

[2] https://www.cleanenergywire.org/news/last-major-german-solar...

[3] https://www.npr.org/2020/01/17/797322305/episode-965-das-gre...

PragmaticPulp• 4 years ago

Piracy is not a theft in a sense that it's just illegal, not fundamentally immoral.

Piracy is definitely a theft. It’s ludicrous to suggest that IP doesn’t have any value like physical property.

starfallg2• 4 years ago

The difference is how the CCP effectively encourage and cover for this type of stealing, for example how the HSR contracts were structured, which was daylight robbery of all of the technologies from the different leaders in the field.

Chinese companies are also aggressive in marketing stolen technologies but because of incomplete knowledge and expertise, end up in sub-standard/broken products, such as the capacitor electrolyte issues around 10-15 years ago.

wwtrv6• 4 years ago

When Chinese were ahead, European stole and smuggled manufacturing technologies from China.

Not disputing this but what technologies did Europeans ever steal from China? I’m only aware of tea and silkworms..

walnutclosefarm2• 4 years ago

Piracy is not a theft in a sense that it's just illegal, not fundamentally immoral. I think it's actually cool historical constant that moves the world ahead.

In as much as the Chinese firms (which in many cases are quasi-state-owned) that do the theft are breaking treaty and contractual commitments, then the piracy is both illegal, and immoral. Not honoring binding commitments is wrong.

I have personal experience with this, with, as it happens, Huawei, who licensed code from the European company I worked for, used it far more widely than the license permitted, and then, when we attempted to negotiate a broader license, simply dropped their license entirely, continuing to use the code until they had reverse engineered it and could generate new instantiations on independently of us. (That much I know to be true; I actually suspect, but don't have conclusive evidence, that employees of our Chinese subsidiary who went to work for Huawei stole source code on their way out the door, making most of the reverse engineering a simple hiring decision for Huawei. I also have reasonable evidence that another Chinese firm did the same with a major American technology company I later worked for, although again, it's difficult to prove).

mc323• 4 years ago

This take ignores the history of the development of intellectual property rights, convention signatories and WTO.

Many, many things were unregulated in the past but ARE regulated today.

If they wanted to maintain a policy of ignoring IP, etc., they they should not have joined the WTO and signed conventions that hold them to obligations.

These organization and conventions set the stage or provide the framework and law by which signatories are bound.

Your argument amounts to: hey, the US and Brazil and the Middle East and many other countries used slave workforces in the past therefore it’s okay for China to do the same today, else they are at a developmental disadvantage.

In any event, I'm quite sure any patent [had the concept existed] would have run out by the time they were adopted elsewhere.

rscho• 4 years ago

China never was ahead.

neolefty3• 4 years ago

Great historical perspective. I'm curious how international intellectual "piracy" looks when one thinks of the world as a single place and humanity as a single people.

georgeecollins• 4 years ago

> When Chinese were ahead, European stole and smuggled manufacturing technologies from China.

Two wrongs make a right..

clusterfish• 4 years ago

You are correct, but I dislike the offended whataboutism tone. That other countries did the same 100 years ago, or even some other countries still do today, is not the point.

The point is it's typical of China to steal IP. It's a problem because it gives Chinese companies an unfair advantage as they grow big by stealing all they want from others, but have their own IP protected in other countries.

It would be nice to live in a world without patents, but that's not the world we live in. So if you're ok ignoring reality, might as well go on a tirade how stealing cash is "not immoral" because you don't believe in government issued tender or something.

ddingus4• 4 years ago

You mean infringing, right?

It's not like anyone is denied property here. The conflict boils down to people doing things other people don't like / want them to do.

Once humans know how to do something, they know. It will spread, eventually becoming common knowledge.

Infringement is the right term here, and it's all about that spread, the timing, etc...

phatfish• 4 years ago

So the same way all the other countries developed technical skills that can support entire economies then.

mullingitover• 4 years ago

Doing what they always do, stealing without repercussions from innovators around the world.

The US invented this practice, we didn't respect the IP of other countries until we started generating significant amounts of our own. China even stole this idea!

AtlasBarfed2• 4 years ago

Acquiring/stealing/conquering techs from competing players via any means necessary in Civilization was a key means to closing the power gap with rivals on upper levels of difficulty.

China has done this to perfection in the real world.

Stealing a tech was a massive diplomatic blow in Civilization. The US just shrugged (because the rich made a huge amount of money and increase of relative wealth status by acquiring a massive slave labor force in China rather than deal with the uppity American middle class).

I just did a light google pass to see if any international relations academics have done anything with Sid Meier's Civ and various other types of games. I expected them to not, because of course academics are STILL "ew, computers" and even worse, it's gauche mass market entertainment.

But the abstraction is, I would argue, more detailed than a lot of academic analyses which are largely bloviation, the game theory quantifiable and measurable, and reduces a lot of complexity that normally would be hard for a garden variety person (aka a gamer) to wrap their head around.

Civ always tried dropping historical tidbits and education into it, but arguably its most potent contribution is simply the more honest treatment of history: civilizations rising and falling, fighting over resources, getting conquered, and getting destroyed, and the roles of economic strength, military strength, and tradeoffs.

dang• 4 years ago

Cheap flamewar comments like this are not acceptable on Hacker News. They lead to repetitive, tedious, nasty flamewars.

Nationalistic flamewars are particularly nasty and particularly avoidable. No more of this, please.

If you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it.

We detached this subthread from https://news.ycombinator.com/item?id=30071505.

paulus_magnus2• 4 years ago

The regulators should never approve such a takeover or should state that this takeover will inevitably result in a forcaful split of NVIDIA. There will be a conflicf of interest between Nvidia a consumer of ARM and Nvidia provider of IP to competitors (Samsung, Qualcom, Apple, AMD).

Nvidia should play ball (or somehow the regulators should nudge them to play ball ) and invite all big ARM customers to form a co-op.

captainbland• 4 years ago

Nvidia would be amongst the worst possible custodians of ARM. Their business models are quite strongly opposing:

ARM's is to create a fair, competitive playing field between CPU producing companies and reap licensing fees for the pleasure, Nvidia's is to nakedly leverage all of its technologies for Nvidia's products' benefit and Nvidia's products' benefit only.

tombert• 4 years ago

While I too was against the NVidia+Arm merger, and am glad it's being abandoned, a large part of me feels like they wouldn't do it just because it could be an antitrust nightmare, with Apple and Qualcomm and LG all suing because of anti-competitive practices, and probably winning. I'm not a lawyer, but that seems like a likely scenario from the very little I understand about US law.

I don't think NVidia would be quite that stupid; I think if they were smart they would keep ARM business as usual just to avoid that, and just reap the licensing fees from the above companies.

naruvimama2• 4 years ago

Microsoft used to be in the same place, they started growing once they opened up. Instead of rent seeking. VLSI is hard, but with massive investments in fabs and design across the board, Nvidia will be forced to go the MS way.

Nvidia licensing their GPU to ARMs customers will itself be a big start.

theonlybutlet• 4 years ago

Insider trading much?

froggertoaster• 4 years ago

I love that this would make Nvidia too powerful.

Uh, exactly what have Google and Microsoft been up to? I'd say they're "too powerful" at this point...

Dah00n4• 4 years ago

It doesn't get better by adding a third to the list. Seems to me you could add Apple above those two though.

nexuist• 4 years ago

exactly what have Google and Microsoft been up to?

Buying chips from Nvidia to power their data centers, for one.

realmsalah• 4 years ago

Nice

011000114• 4 years ago

I wonder how the average ARM employee feels about this. Are they losing out on a windfall from their labors because the deal fell through? I wonder if that will affect retention?

interator7• 4 years ago

It always blew my mind that Arm is worth that much solely licensing intellectual property. Wouldn't it be more cost efficient for some of their biggest customers to simply hire engineers who can produce similar output? Can someone give me insight into their design team?(size, history, experience, etc.)

Aissen3• 4 years ago

Designing a CPU is easy. Very easy, any grad student can do it. So why is Arm worth so much ?

Because it's only part of the problem. If Arm is so successful, it's (IMHO) because of software. Sure, they have world-class CPU designers. But in order to launch a new CPU, you need a full software ecosystem, as RISC V startups are discovering.

One other advantage of Arm is that it has strong anti-fragmentation measures in place. With enough money you can design your own cores, but in order to deviate from standard Arm architecture, you need Arm's signoff. This serves the first advantage: it keeps the software ecosystem value intact.

smoldesu2• 4 years ago

But in order to launch a new CPU, you need a full software ecosystem, as RISC V startups are discovering.

You should have seen the state Raspberry Pis were in circa-2011. Everyone online was treating it like the RISC-V of today, criticizing it for a complete lack of software and calling it a novelty board. Lo and behold, come 2018 everyone and their mother wanted a Raspberry Pi for some purpose. Sure, 70% of the software people wanted to use wasn't available, but the things it had were power efficient and performed just about on-par with it's x86 counterparts. RISC-V is between both of those stages right now, the biggest limiting factor is getting hardware into the hands of developers, which is starting to dissolve as manufacturers are catching on.

This serves the first advantage: it keeps the software ecosystem value intact.

Why do people assume that adding an extension to your RISC-V processor throws the software ecosystem out the window? It's the exact same scenario as ARM, except you're not beholden to arbitrary version updates (eg. v6, v7, v8) that break compatibility. If you want to upgrade your ISA, you just... do. Your base instructions will still run fine, and software compiled for RISC-V will just run. The only way you could fragment like that is if your chip failed compliance tests, which... why would you even ship it then?

klelatti11• 4 years ago

It’s not about a single design team - it’s about a thirty year effort to make available ISAs / CPU designs that SoC designers can incorporate into their products (sharing the costs of their development) and immediately tap into a wider hardware / software ecosystem.

A large company could do it but do you really want to build your own LLVM backend? And the largest Arm customers do design their own CPUs.

Of course RISC-V potentially challenges this model.

intrasight• 4 years ago

As I never thought there was synergy here, I think Nvidia will do better without ARM. There is plenty of growth in their core domain.

Symmetry• 4 years ago

As a NVidia shareholder I'm relieved at this. ARM is clearly less valuable as part of NVidia with all the conflicts of interest that entails than as an independent company. NVidia talked about synergies but they could pursue all of those with an architectural license for far less money. It's actually something of a pattern that most mergers fail to provide synergy and destroy value, it's just that they enlarge the empire of the CEO and so seem attractive from that standpoint.

snvzz• 4 years ago

ARM gets the short end of the stick here.

NVIDIA being a well known hostile company, the industry did not miss the news about its ARM purchase intent. And thus they looked for alternatives. That's RISC-V.

Today, pretty much every company designing microcontrollers or SoCs is involved with RISC-V. They won't cancel those efforts to embrace ARM again.

sho_hn• 4 years ago

Sad memories of Nokia. The N9 debuted to great reviews and was built on a promising tech stack that continues to outlive it today (Qt, etc.). Repeated takeover attempts and intent by Microsoft, and finally installing an ex-MS VP who cancelled the platform internally before an actual sale to Microsoft, was too much of a distraction.

It's hard to survive a bodged takeover attempt, much less an actual takeover.

mdasen3• 4 years ago

That's actually an interesting side-effect. What happens to ARM now?

New players who are looking for a long-term strategy are looking at RISC-V (as you note) in part due to Nvidia's reputation. Despite the deal being quashed, they're probably going to continue along that route.

However, it seems like ARM licensees might also be making plans to become less dependent on ARM (the company). The Nvidia/ARM deal was announced September 2020. Qualcomm announced that it was going to buy Nuvia (founded by ex-Apple Silicon people) in January 2021 along with plans to launch their own internally-designed CPUs (rather than relying on ARM reference designs). I think this is a smart plan regardless of the Nvidia/ARM deal, but creating your own cores means that ARM has little-to-no leverage over you. You don't need their new CPUs. Sure, ARM still updates their architecture periodically, but you can happily continue along making your own CPUs under a perpetual license. Qualcomm is making the jump to its own cores so that it doesn't need ARM reference designs.

SoftBank is somewhat souring on ARM since it isn't getting the huge returns it was expecting by owning the CPU that everyone was going to use in the future. Will SoftBank end up short-changing R&D at ARM making their reference cores less competitive with Apple Silicon and future Qualcomm cores?

Even if SoftBank was able to sell ARM for $40B, they bought the company for $31-32B in 2016. Basically, the sale meant only 5% annual returns which is pretty bad compared to the huge gains an index fund would have made during that time. I think there's going to be pressure to find a way to squeeze money out of ARM.

Heck, with Qualcomm moving away from ARM reference cores, that's a lot less revenue for ARM. Even if Qualcomm cores aren't better, Qualcomm is still a huge portion of the mobile CPU market. Every ARM CPU maker that starts making their own custom cores means less revenue for the reference designs and less reason for ARM to invest in those reference designs. If ARM starts reducing investment in their reference designs a bit, that will put pressure on more companies to create their own custom cores.

The sky isn't falling and I don't want this comment to sound like that. I think ARM has a fine, sustainable business. At the same time, it seems like there will be pressure from SoftBank given the lackluster returns even with the Nvidia deal and Qualcomm buying Nuvia puts further pressure on ARM and it's hard to justify a major investment in something that is likely to continue having lackluster returns.

klelatti11• 4 years ago

I think it’s reasonably clear SoftBank’s stewardship of Arm has been poor - sure they have invested but the Arm China move backfired badly and this Nvidia uncertainty has also hindered Arm’s development.

sjtindell• 4 years ago

As an outsider, it looks like RISC-V is ipv6. It’s always coming, everyone’s interested…but nothing.

cbsmith2• 4 years ago

ARM gets the short end of the stick here.

In terms of "if the deal fails", yes. If the deal succeeds, they made out like bandits.

bitwize• 4 years ago

I think Apple should buy ARM. Then they will own the entire iPhone and Mac tech stack -- right down to the ISA. It's hard to think of a more competent steward for the technology than Apple.

b20000• 4 years ago

RISC-V still does not offer an alternative to high-performance ARM SoCs such as the A17.

enos_feedler• 4 years ago

If ARM IPOs in a reasonable timeframe they will be fine. Hopefully a bunch of big customers take large stakes (apple, qualcomm, etc).

simonh2• 4 years ago

ARM’s business is just fine, they’re a healthy company with fantastic technology and happy customers. Maybe they were overvalued by SoftBank, but that’s Softbank’s problem. It doesn’t mean ARM is a bad business. They’re just not growing spectacularly, but maybe that’s ok.

monocasa12• 4 years ago

Nvidia also clearly already has an architectural license for their Denver cores and derivatives.

overview• 4 years ago

Citrix and Wrike in a nutshell.

skinnymuch2• 4 years ago

Haha what a funny acquisition. There’s no synergy there besides I assume weak attempts at bundling things.

thedigitalone• 4 years ago

Paywall, archive link here: https://archive.fo/vl5Or

phendrenad2• 4 years ago

I never understood this deal. Nvidia can hire some CPU designers and make a RISC-V core and join a much more vibrant ecosystem. Why settle for ARM?

Blammar• 4 years ago

Bird in the hand versus two in the bush, perhaps. ARM is proven, RISC-V isn't (do you know of a RISC-V chip that is competitive with Apple's M1 ARM-based chip?)

awill• 4 years ago

It seems crazy to me that Blizzard/Activision is worth more than Arm. I get BA has tons of world-famous games, but almost every phone on earth is Arm. Arm is taking over laptops and servers too.

JumpCrisscross• 4 years ago

almost every phone on earth is Arm. Arm is taking over laptops too.

Is there a RISC-V analog to Blizzard/Activision?

jdhawk• 4 years ago

SiFive?

Cyph0n• 4 years ago

Ubisoft?

throwaway9465132• 4 years ago

Indie developers?

mhh__• 4 years ago

Is there a RISC-V analog to ARM? They're simply not in the same league (yet).

__s• 4 years ago

I imagine Blizzard would be worth less if all their IP was licensed out to other large game studios with very liberal terms

stefan_• 4 years ago

And everyone actually making competitive products was doing so because of their own extensions, not whatever Blizzard did.

mrandish2• 4 years ago

Yes, that's a big reason why the valuations are different. ARM's designs being so central to the products of so many companies has occurred only because of ARM's licensing terms being so liberal, including things like forward pricing caps, MFN clauses, etc. They basically chose to trade away pricing power (hence margin) for ubiquity and longer-term relationships.

easton_s• 4 years ago

This is the current LucasFilm Games model. No more artists, only managers and sales who have no true vision for their IP.

ashtonkem• 4 years ago

This is one of those arguments that the stock market doesn't really align value with social need. Making games is good and all, people like and need entertainment, but from a social perspective we need ARM more than we need Activision.

missedthecue• 4 years ago

The stock market (attempts to) align value with future projected cashflows, not social need. I don't believe it's ever been the case that social need was part of the equation, particularly given that it's such a subjective measure.

mr_toad2• 4 years ago

We need water more than we need diamonds.

thrwyoilarticle4• 4 years ago

Arm has an unusually high relevance/value ratio. As Softbank found out, you can't just ramp up the licence costs. It's also not as scalable as software and doesn't have the revenue of the hardware licensees. I wish it would be bought by an open consortium to protect the millenia of engineering hours from snatch-and-grabs like these or the tyranny of uninformed investors but FAANG et al passed up the chance to secure their computing future last time. They've been blessed with another chance, hopefully this debacle has been eye opening.

I wouldn't be surprised if Arm employees create more value for other companies than they do for Arm.

klelatti11• 4 years ago

Great comment and your last para is undoubtedly true. Really surprised that the hyperscalers don’t see the value in investing in Arm to develop competitive server / cloud CPUs.

011000114• 4 years ago

open consortium

You expect an open consortium to continue to innovate in an industry leading way? An open consortium is how you kill ARM. ARM didn't get where it is now by being sub-par.

I appreciate your intent and it seems like a nice idea, but my experience with community development means ARM would turn into an absolute shit show as various stakeholders fight for control and ram through a mish-mash of their pet personal features.

mbesto• 4 years ago

I like this quote about entertainment:

"Two weeks ago, at the Code Conference, Endeavor CEO Ari Emanuel claimed “the total addressable market of content is infinite.” Netflix is spending $17 billion a year to validate his thesis. So far, they’re both right."

https://www.profgalloway.com/stream-on-2/

sydthrowaway2• 4 years ago

Consoom

papito2• 4 years ago

As Scott Galloway put it, Call of Duty alone generates $55M a day, as if it were a door-busting Marvel movie opening weekend, all the time.

sydthrowaway2• 4 years ago

And yet gamedevs are paid like crap

Who gets the money?

paulmd5• 4 years ago

dang, $20b a year for COD alone? I realize that's the crown jewel in ActiBlizz's portfolio but that does kinda put the acquisition into perspective, you could throw away every single other IP they own (and there are numerous ofc) and Microsoft only paid 2.5y of revenue for COD. $70b is really kinda cheap.

(I realize there's some ongoing development costs there - that $20b a year is conditional on you spending $500m a year to make next year's game - but there's also no reason to doubt that revenue stream will continue either. COD is shovelware (it's AAA but you get my meaning) and if you just don't mess it up (BF2042 says hi) then there's no reason to doubt the customers will keep coming back. And again, that's 2.5y revenue of just one asset of a giant company. Cheap cheap cheap.)

colinmhayes• 4 years ago

Microsoft saw how successful sony's strategy of exclusive games was last generation and is copying it to help their SAASification of the gaming market. Microsoft is also well positioned to build a successful VR headset since they control the enterprise productivity software market and can parlay that into hardware employers will buy for their VR meetings. Combining their exclusive games and employer sponsored headsets could lead to Microsoft dominating the VR market.

So really I think the synergy between microsoft and activision is where a lot of the price comes from as opposed to the actual cash flow that activision brings in.

throwawaylinux2• 4 years ago

There's really very little "innovation" in the ARM ISA. Or any ISA these days. It is an API. ARMv8 is nice but it's just warmed over RISC -- actually a lot of things that differentiated previous ARM ISAs were removed to make it more like a standard RISC! The value they add is basically nothing except holding the key to being compatible with ARM ecosystem. At this point extracting their tax on their proprietary ISA is close to rent seeking. That drag on the market is why people are looking to real open ISAs.

EDIT: That's not to take away from what architects (ISA designers) do. It's extremely difficult to develop precise and consistent ISAs especially when things like memory ordering, interrupts, pipelined execution, TLBs, etc come in to play. And they are gradually gradually adding features and improving. But this is not value to the tune of over half a billion dollars per year just for ARM licensing (then imagine x86 equivalent numbers for that very locked in ecosystem).

ARM is not in a rosy place with their ISA. Their biggest customers like Apple can and will lift and shift their entire ecosystem if ARM do what it's told. Android could start supporting other ISAs too if someone was motivated enough. And many of ARM's new customers outside the traditional low end embedded world (e.g., in servers) who have been the first ones to move to ARM have done so because their software stacks are very portable. This means they can relatively easily move off ARM as well.

Their logic designs for high performance CPUs don't seem to be top tier either. Not to say that in a disparaging way but for example the PA Semi team Apple bought blew past ARM's high performance mobile designs with their very first ARM core. https://www.anandtech.com/show/6330/the-iphone-5-review/

ARM is pretty decent but behind the likes of Intel, AMD, Apple for high performance cores. So if the ARM market gets bigger and more lucrative especially in the server space, they are vulnerable to other companies selling their own chips and cutting ARM's designs out of the high margin sales. Amazon could be designing their own core right now to use in their ARM servers in a few generations for example. Just as Apple did with its iphone chips. AMD could start making ARM server CPUs if that's where the money is.

floatboth• 4 years ago

Amazon could be designing their own core right now

Would require an architectural license and lots of talent and time.

Getting stock Neoverse cores is an incredible deal for them, this is probably a big part of the reason they can offer cheaper services from their chips.

Arm cores aren't really all that behind, there are just tendencies for wildly incorrect comparisons (past Arm cores vs upcoming competition cores, scale-targeted configurations vs workstation-targeted ones, etc.)

fomine32• 4 years ago

I was surprised how Activision/Blizzard valuation big. Anyway because they earn $$$ from game.

greatjack613• 4 years ago

For all those that need to get around the paywall.

https://webreader.app/?url=https://www.bloomberg.com/news/ar...

kunai• 4 years ago

God bless Lina Khan.

indigodaddy• 4 years ago

Would it be way too cynical to suggest that the reason that this deal was/is not likely to close, is because Intel is influentially and aggressively/successfully lobbying against this?

How would smoothing out the current Intel/AMD machine not be healthy overall?

dafty4• 4 years ago

Did anyone expect a different outcome?

sytelus• 4 years ago

These days, I don’t know if it makes sense at all to get sold out to anyone. Why not IPO? It’s a free never ending river of money that you can dip again and again. With proper voting structure, you retain full control and never fear dilution. Additionally, no dividends ever which means no worries about returning investor money or any real ROI. Over time, get included in one of the ETF index and you are set to unimaginable market caps. Selling out is for the losers, IMO.

vassilevsky• 4 years ago

Shit, I was hoping so hard on a gaming SoC that would put Intel out of PC gaming already ;(((

Nvidia prepares to abandon $40B Arm bid

Related Stories