Nvidia wants to buy CPU designer Arm – Qualcomm not happy with it | GeekComparison

Some current Arm licensees consider the proposed acquisition highly toxic.
enlarge / Some current Arm licensees consider the proposed acquisition highly toxic.

Aurich Lawson / Nvidia

In September 2020, Nvidia announced its intent to buy Arm, the licensee for the CPU technology that powers the vast majority of mobile and high-performance embedded systems around the world.

Nvidia’s proposed deal would buy Arm from Japanese conglomerate SoftBank for $40 billion — a number that’s hard to put into perspective. Forty billion dollars would represent one of the biggest tech acquisitions of all time, but 40 Instagrams or so doesn’t seem like a lot to pay for control over the architecture that supports every known smartphone in the world, plus a staggering number of embedded controllers, network routers, cars. and other devices.

Today’s Arm doesn’t sell hardware

Arm’s business model is quite unusual in the hardware world, especially from a consumer or small business perspective. Arm customers, including hardware giants like Apple, Qualcomm, and Samsung, don’t buy CPUs like you would an Intel Xeon or AMD Ryzen. Instead, they buy the license to design and/or manufacture CPUs based on Arm’s intellectual property. This usually means selecting one or more reference core designs, putting several in one system on chip (SoC), and tying them all together with the necessary cache and other peripherals.

Arm has multiple licensing models for customers of different sizes, with varying amounts of permission (or lack of permission) to innovate on their original reference designs. How much it costs to buy one of those licenses – upfront or per device manufactured – is a confidential question we’ve asked many suppliers, with no hard answers.

What exactly does buying Arm get you?

If Nvidia acquires Arm, the first and most obvious benefit will be the licensing revenue stream from the design company — and it won’t have to pay any IP licensing fees itself. However, this is probably the least important facet of the deal.

Owning Arm in full would also give Nvidia a lot more leeway to innovate in design. We spoke to several vendors who described the kind of innovation that the RISC-V architecture enables as virtually impossible with Arm; the sellers have said that “they just won’t allow you” to make changes, such as adjustments to the instruction set.

If Nvidia owns Arm, it will no longer face such restrictions. This could make it easier for the GPU manufacturer to innovate on the CPU side and free it from the necessary alliance it has had with Intel in manufacturing leading supercomputers… deeper into Nvidia’s territory with its Xe GPUs and its oneAPI initiative, which aims to decouple the GPU-based machine from the underlying GPU hardware.

So far, so good — and in fact Nvidia describes the acquisition in exactly such terms, referring to it as “creating [the] the world’s foremost computing company for the era of AI.” But it may also provide Nvidia with leverage across the entire mobile computing industry, which is currently tied to the ARM instruction set architecture (ISA).

Objections galore

There’s no particular reason to believe Nvidia wants to enter the smartphone market, but if it did, Arm ownership could potentially allow it to innovate with its own designs in ways that Qualcomm and other manufacturers subject to strict licensing requirements would not be possible. The company may also choose to block companies from accessing ARM licenses outright, either on its own admission or as a result of pressure from the US government.

According to CNBC, Qualcomm is one of several Arm licensees that continue to object to the acquisition. While Qualcomm has so far declined to comment publicly, CNBC sources say it believes Nvidia can’t complete the acquisition without “crossing certain boundaries that people worry about” — most likely the anti-competitive lines we took above. discussed.

Tech investors Nathan Benaich and Ian Hogarth clearly agree; their 2020 “State of AI” report cites founding Arm investor Hermann Hauser as describing the acquisition as leading to significant job losses and adding the company to the US’s “trade arsenal” — making it possible for the US government to target specific companies. to block access to Arm designs. The British Labor Party also has strong reservations and has urged the British government to intervene.

Chinese tech companies like Huawei are objecting to the deal for the same reasons — not unreasonably, as they’ve already faced several heavy-handed attempts to block it and other Chinese companies from using what the Trump administration deemed “American technology.”

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