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.
Look, Nvidia is obviously far from perfect, but the alternatives seem far, far worse. Would you want Arm to end up at Google, Apple, Microsoft, Amazon, or one of the big Chinese players? I’m simply afraid an independent Arm will end up in far worse arms a few years down the line than Nvidia.
The time to fix this… was many years ago.
When SoftBank acquired ARM, nobody questioned the deal back in the day. However their operations do occasionally sell off assets. And especially more so when their actual investors (big national sovereign funds) want to withdraw monies.
So, today they have to find someone, anyone, who can pay $40 billion.
Of course that list is pretty narrow. They can try to go public, but that is even less likely to bring the required funds.
To be honest, the only two players with minimum impact would be AMD and Intel. Not any of the ARM customers like Qualcomm, Samsung, or Microsoft.
Whatever happens, this situation is not very good. Or rather, not good at all.
sukru,
I don’t know if any of them would get regulatory approval. I think that owner restrictions get worse when software companies control the hardware though. This can happen either directly or indirectly (ie microsoft requiring ARM hardware manufactures to lock out owner control over UEFI secure boot for windows certification).
I’d much rather see ARM go to an organization dedicated to openness for everyone, say the FSF. But this is obviously wishful thinking.
There’s still RISC-V if things really go south with ARM. I think a transition from ARM->RISCV would be easier than x86->ARM because a lot of ARM software is already JIT compiled byte code rather than architecture specific binaries. A lot of android users could make the switch to RISCV without paying much attention. My wife used an atom version of android and she had no reason to know or care that it wasn’t using ARM.
Of course RISCV still has to prove itself. And there’s no guaranty it won’t end up being vendor restricted by the time it reaches consumers, thus negating its existence as a would-be open architecture.
Alfman,
I am a bit more worried about chip manufacturers, than the end consumer in the ARM saga.
Whoever owns ARM has the potential to strong arm Samsung, Qualcomm, Apple, Microsoft, Broadcom, and many more companies to their whims. It would not be easy, for example, for Apple to replace the M1 design with RISC or any other architecture in short time.
And this is definitely a failing of our market system. What ARM does is definitely not worth $40 billion. Even at its current $24 billion market cap “price to earnings” is over 70!. At $40 billion, it would literally take over a century to pay off that value: https://uk.advfn.com/stock-market/london/arm-holdings-ARM/financials
The non-spoken truth is people are expecting the new ARM owner, whomever that would be, to “make use of the platform”. In other words “play dirty”. There is no other explanation (ARM would not suddenly get 10x more licensees, for instance).
Or drop the price to a reasonable amount, like $4 billion. Which would be unacceptable for SoftBank.
That is why the situation is not tenable.
(Edit: I am still a novice on the RISC front, so did not want to comment on it much).
sukru,
I see what you mean. It could be used to harm other competitors, and as you point out that might even be the primary source of value in buying ARM for such a high price.
I think giving software platform vendors too much control over hardware could be bad for consumers too though.
Apple licensed the ISA and make their own cores. So whoever owns ARM is of little consequence to them. Qualcomm is also doing their own ARM cores.
NVIDIA is extremely cash flush, and they want to break into the mobile SoC market which they keep failing. So buying ARM made sense as a risky bet.
I think ARM going public and allowing the big players buy controlling shares makes the most sense, and it will likely the route SoftBank will take to recoup their investment.
javiercero1,
I’m not aware of the terms of their agreement, but being a licensee doesn’t automatically imply their agreement allows them to arbitrarily fork the architecture – that would dilute the value for ARM as an industry standard over time. Otherwise ARM’s business would be predicated on one time payments with no future. I agree with sukru that apple and other licensees probably would rather have ARM’s future be with a neutral party if not themselves.
I agree that could be a favorable over one big player getting full control through exclusive ownership.
NVIDIA wants mobile SoC but they also want servers ( well, cloud data centers ). I think the real play though was to make ARM with MALI entry level and ARM with CUDA the high-value offering. NVIDIA would love to make CUDA the default platform on the edge ( mobile ) and the cloud ( server ). In my view, that is where they were going to make their money on this.
tanishaj,
nvidia already has ARM with CUDA chips. Tegra X1 is working well for their streaming device, and the Nintendo Shield, and Xavier is used in embedded AI systems (car vision, etc).
https://en.wikipedia.org/wiki/Tegra
I don’t think they need ARM’s ownership for moving these to the server space. They can still offer the same with their own internal resources, or maybe a joint project that would cost much less than $40 billion.
s/Nintendo Shield/Nintendo Switch/
(Shield is nvidia’s device)
@sukru
I know that NVIDIA uses ARM today. We use the Jetson modules extensively. The difference is in being an ARM licensee ( like everybody else ) or being the one defining the core technologies that will become part of everybody else’s platform. Not everybody is Apple or Qualcomm that license the ISA but do everything else themselves.
Much of the ARM ecosystem is not just going to design a chip around ARM9, they are going to download the Verilog for the Cortex-A710 and make some tweaks from there ( or maybe not even ). If ARM pushes the technology in a certain direction, a huge chunk of the chip market follows.
NVIDIA today does not have that leverage. They cannot set the standard for server chip architectures. They cannot even do it in mobile. Today, NVIDIA is just another chip supplier with a particular niche and little influence on the industry outside of that.
tanishaj,
I think we say a similar thing, with different words.
Yes, NVIDIA will want to leverage the control of the company to push their designs to existing ARM customers, even if they don’t want it.
I am not sure this is good for the industry. Hence many pushed back against it.
(Compare that to MS/Activision deal, which is almost 2x in size, but received much less complaints. They would not be hindering the market – as much – even when combined together).
@Alfam
Apple is a foundational member of ARM. All they care is the ISA, which they have licensed for perpetuity. Since they are not dependent on ARM’s cores they are not that worried about a possible NVIDIA take over.
javiercero1,
A “perpetual license” may allow a licensees (ie apple/qualcom/nvidia/etc) to continue using a given ARM spec to produce CPUs like the M1 indefinitely…but that’s very different than licensing future specs developed by ARM and ARM’s new owners. It would be a huge poison pill to anyone wanting to acquire ARM if their assets including future development must be given away to previous license holders.
If you have any public proof that the license gives apple rights to all of ARM’s future work, then I respectfully ask you to provide it. But otherwise I think it’s reasonable to think that licensees including apple do face the risks over control that sukru mentions.
@Alfman
I didn’t claim Apple has the right for ARM’s future products in perpetuity. Any future IP will have to be obviously negotiated. Just that for what Apple uses from ARM right now, just the ISA, they are fairly shielded from most of the rest of ARM’s IP.
Apple has an Architecture License with ARM, which allows them to take the ISA and core architecture extend it however they like it. NVIDIA has a similar license BTW.
Whoever takes over ARM will have to honor all their current licensees.
javiercero1,
Ok, but that IS what sukru and I are talking about. Apple’s (and everyone else’s) interest in ARM’s future doesn’t simply end when it gets bought, Future consequences depends on future ownership.
There may very well be limitations as to what licensees are allowed to do and the ways they can extend it in the interests of keeping the ISA coherent. Again if you are aware of factual information sources, I’d appreciate a link because I’d rather not speculate with you about what is or what isn’t in the license.
We would be cycling around the same topic. However as Alfman mentioned, we have no information about their future plans.
Even Oracle had made (and kept) promises for existing users of PeopleSoft, when they acquired the firm: https://www.smallbusinesscomputing.com/networking/peoplesoft-keeps-its-promise/ . And that was on much less peaceful conditions than the ARM deal.
Or last week’s Microsoft deal, where they spoke to Sony execs to assure them of the future.
Without NVIDIA’s own promises, it is not unreasonable to assume a worst case in this merger.
@Alfman
https://www.anandtech.com/show/7112/the-arm-diaries-part-1-how-arms-business-model-works/3
This reference should be right about your pay grade. Cheers.
javiercero1,
Actually I came across the exact same 2013 anandtech link and it’s followup article when I searched, but It doesn’t list license terms in detail. It doesn’t look like any of us have enough information to avoid speculating, so it makes sense to leave it here unless someone finds more public information. Cheers!
@Alfman
Well, you ain’t going to find details from trade secret documents from a simple google search. And what I said it’s not speculative since I provided a reference regarding Apple’s licensing level w ARM.
In any case this is moot, since NVIDIA is dropping the bid.
javiercero1,
The whole point was that none of us know the specific terms they agreed to. Without a document, it’s speculation.
The same questions over ARM’s future still apply with any buyer though. Anyways I don’t see what more there is to discuss, there’s just not enough public information.
@ Alfman
I gave my informed opinion. I work for an organization with an Arch license from ARM. The one speculating about matters they have no clue is you.
Cheers.
javiercero1,
I don’t know why you insist on speaking down to people but your accusation is not warranted. I specifically refrained from speculating and repeatedly asked for detailed sources! I am very interested in the facts along with everyone else, but since no one including you has been able to provide more details, there’s just nothing more to say. Cheers.
So an other way would be: ASML buys ARM. Both companies are in the business of helping companies that produce chips (ASML for the fabs and ARM for those designing the chips).
Plenty of people questioned the original ARM deal. The problem is the UK has weak strategic legislation and successive governments of all flavours have failed to address this. The government of the day bungled it. The current government cannot even be described as a government. It’s more a front for billionaire vested interests and far right think tanks funded by dark money often from abroad. They are a national joke and international humiliation. Most of them and their cronies and backers should be in jail.
Cadbury was the first big wake up call in recent years and the incompetents running the show learned nothing.
Hermann Hauser has had “sellers regret” and called for nationalisation.
HollyB,
I would agree with you for once. They should have never sold ARM in the first place.
This is the best comment I have read from you. Looking forward to more like this.
The truth is that Nvidia is probably the best option is we want a solid future for Arm because there are two main posibilities:
* A technology company. It can be NVidia or Samsung or another one. Nvidia is a good option because they know what the chip bussiness is about.
* A financial investment: a financial fund, a investment company, etc. They don´t care about the technology and they would gladly cut ut and destroy Arm if they earned more money that way.
UK should buy back ARM.
Or maybe some EU wide technology fund? So much talk about bringing chip manufacturing to EU so it perhaps would make sense?
I wouldn’t be against an EU member state buying ARM as long as it’s somewhere responsible. God, they own everything else and are largely preferable to American ownership. It would sting but we are where we are.
ARM doesn’t produce chips. It’s a company which helps other companies design chips.
Don’t know why this keeps popping up as a solution. UKPLC has an awful track record of taking companies into public ownership. From British Leyland to running energy companies (look up the recent collapses of Robin Hood energy as one of the examples). Plus of the politics of international sales. Whole markets would instantly shut down to ARM because they are operated by the state. There is precedent for this in Xiaomi and 5g rollout in the UK.
Codswallop. The politics of the day was a struggle been an old and complacent and tired establishment and unions. Many of the biggest failures in IT were largely down to a braindead support America policy as much as any management failure. ICL is one example but there are others. Outsourcing and lack of government support put paid to Apricot. QinetiQ and the arms industry which the UK government went all in on after giving up on pretending to support industry are doing very well.
Plenty of companies have been nationalised and actually done better. Rolls Royce (the jet engine people not the car people) which was within weeks of bankruptcy is one example. Many infrastructure and utility companies did better under nationalisation than when they were later privatised. The failures of Marconi and GKN and ICI were down to managers and financiers trying to be clever.
As for international sales going bye bye if ARM were nationalised don’t be stupid. For a start the legal environment is completely different from China. Secondly GCHQ already own your asses before you build the hardware. They make the NSA look clean and that is contained in the Snowden leaks.
Energy market failures on the UK are down to hands-off government trying to do things on the cheap as well as a stupid shoot yourself in the foot Brexit. The lack of gas storage facilities, stupid attachment of electricity to gas prices, and coming off the EU pricing mechanism is what happens when you kowtow to the City and right wing media.
I’m old enough to remember when all this happened so not cribbing off Conservative Home or whatever comic book you get your ideas from.
You seem to have tied yourself into a doublethink combined with personal attacks against anyone that doesn’t support your world view. I’ll leave you to your toxic echo chamber. Please leave me out of it.
I thought it was a solid comment, until the last line.
BTW I don’t understand how Nvidia is a good company to acquire ARM. They have engaged in patent trolling, not only against Samsung but also industry-wide (which they tried to frame as a “Kepler license”, despite not actually licensing anything related to their Kepler GPUs, all that was “licensed ” was a promise to not be sued for vague patent infringement by Nvidia). SemiAccurate was very good at calling them out on that. Also, the industry didn’t bite and Samsung won the suit (the verdict was that no patents were infringed).
If Nvidia is allowed to purchase ARM, there is a good chance they will discontinue the existing ARM GPU licensing options and replace them with Nvidia-branded ones, offered at Nvidia mark-ups. This is why this deal is facing so much scrutiny: lots of industries could end up paying Nvidia markups for their ARM GPUs.
They would probably keep MALI technically but let it atrophy ( they are not the one making the chips — it does not really cost anything to keep it around ). GPU designs using CUDA would be “offered” in parallel but this is where the innovation would go.
At the low end, I could see them making GPU designs available inexpensively or even free. CUDA could even be free ( gratis but not libre ) but NVIDIA would control the developer ecosystem and could carve off the cream for themselves anywhere and anytime they wanted to. The model could be similar to the model Microsoft employed for so long where they let the client spread very widely for cheap or free ( allowing piracy — giving away the browser ) in order to make bank on the server side while using their “leadership” in the development community to control the industry dynamic.
Does it really matter? MALI is a propietary architecture: they don´t even publish its instruction set.
Also, does anyone know how I can disable this annoying dark theme? Not every one of us has our monitor/screen brightness set to 100% all the time.
At the bottom of https://www.osnews.com/wp-admin/index.php
The dark theme isn’t new, but it looks like parts of the website are not loading properly somehow and it’s causing osnews to bug out. It’s showing the wrong theme and portions of the webpage are missing including the links that are supposed to be at the top right.
Requests to cdn.optkit.com in particular are failing and have been since yesterday, so that’s probably to blame if nothing was changed.
One thing I would like is for economists to look at the telephone number billions these big companies have versus the complete lack of liquidity at the bottom of society. There is already talk of not having 1970’s style “stagflation” but something else. I forget what name they gave it but it’s a weird kind of lack of growth.
One thing you have to consider is these vast billions come from monopoly encouraging regulatory environments as well as tax regimes which are soft on corporations as well as lack of fair wages and cutting of public services. All of this has a depressing effect on an economy as well as creating lots of other problems.
Money and the real economy are not the same thing. Money under a fiat currency is a way of creating debt and directing effort. Debt actually isn’t bad. It’s really borrowing from the future to invest in today such as creating the conditions for a healthier and fairer society or R&D or necessary infrastructure or education and a million other things which enable us to take a step forward. This gain wipes out any notional amount of debt. Some governments especially more right wing governments like to be tough on debt and fiscally prudent but what does this mean in reality? Tax cuts for the already super rich and hiding public policy behind fiscal policy. Oh, no we cannot provide free school meals for children because it wouldn’t not be financially sound? Well, I just read a report on a study this week which pointed out that early intervention with poor families helps poor families children’s brains develop as well as those in rich families. The rich have no patent on genius so by disguising public policy behind fiscal policy they may be denying us the next Einstein.
Every time one of these big companies use their funny money to buy up other companies or poach other companies employees they are effectively making the soil on which civilisation, our economy and society, depends on less fertile.
Microsoft’s profits have just gone up by 20%. Stop and think about that. In the middle of depressed economies. In the middle of a pandemic. When poverty is increasing. Their profits have gone up by 20%. How is this right?
HollyB,
That’s what almost every politician does, the problem is it leaves cities and towns broke. We need investment, but the only sound policy is for it to be paid for by the people with money today! Government debt is just fancy accounting that steals from future workers so that people with money today don’t have to pay. Our motto may as well be “tax cuts for the wealthy, debt to the rest”.
What are you talking about? Schools in the US have long had policies to give poor students free lunches via state and federal programs. During the pandemic they even expanded it to all students.
https://www.msn.com/en-us/news/us/usda-extends-free-meals-for-all-students-through-2021-22-school-year/ar-BB1fUpoa
Are you talking about the UK? Even there it looks like 20% of students get a free school lunch.
https://www.bigissue.com/news/social-justice/free-school-meals-everything-you-need-to-know/
You need to go back and read my comment on the UK government near the top of the thread. Then you need to read it all again and go back and re-read the Big Issue citation again and do some reading up on what the scandal in the UK was about. I’m not saying what you think I’m saying.
You misunderstand what debt is as well as funding models within governance frameworks. A lot of people including the ultra-wealthy (especially the ultra-wealthy) misunderstand the value of progressive taxation. You can tax the rich more (including higher rates, wealth taxes, and inheritance taxes) as well as raising debt to direct an economy particularly when debt on the international markets for a developed country is close to zero as well as a nation states form of debt issued in its own currency is effectively owing money to itself so doesn’t work like a credit card. It follows on that people misunderstand the difference between money and the real economy, as well as not having much of a clue about behavorial economics, or waking up to the illusory GDP growth within a deflationary economy. It’s all a bit of a Chicago School con.
You also need to read the bit about the destruction of industry in favour of military and the tilt towards the City. The UK also has a higher income disparity than the US while being among the very lowest when it comes to welfare payments in Europe. The privatisation program was so extreme even the US flinched from going that far. The French are currently faffing with the idea of privatisation. The Netherlands is pushing through cuts to healthcare spending. I suggest to them these are very bad ideas. Take a pause and think through this before you do something very stupid.
Also:
https://www.pnas.org/content/119/5/e2115649119
https://www.joe.co.uk/life/photos-show-amazing-impact-rashford-has-had-onfree-school-meals-campaign-in-a-year-297612
My mother was old enough to have lived before the creation of the NHS and welfare state. She told me how children went to school with no shoes or ate sugar sandwiches for dinner. She also said Tories never change. She was right.
HollyB,
Disagreeing with you over the benefit of public debt does not imply a misunderstanding. Debt has become a crutch. Debt has given Republican administrations in particular the tools to irresponsibly cut corporate taxes instead of balancing the budget.
https://zfacts.com/national-debt/
If you really want to give it to the corporations & ultra-wealthy, you should insist on no more debt and force them to pay taxes instead.
Anyways your post is all over the place. I was just letting you know that free school meals are a thing since you seemed to assume they weren’t.
Please do tell us how progressive taxation and debt creation are mutually exclusive. Please also explain how I got the poverty and free school meals issue wrong. At what point did I ever say I was speaking exclusively of the US as you’re trying to twisting the framing around to being? Now also explain money versus the real economy and inflationary/deflationary models because quite frankly I don’t see you having a clue about the topic. Do you even know what behavioral economics is? I know what it is because a senior retired economist told me what it is when we were discussing economics with another person who has a public profile, and having to defend economics opinions against what is politely described as rigid minded polemicists.
I didn’t get any of it wrong and you’re just being your usual difficult self when you don’t understand a topic. I have also noticed your buttering people up in some topics balancing your projecting and backstabby office politics in another topic.
As for being all over the place you try condensing 50 years of post-WWII politics and economics into four paragraphs and see how well you do.
Also it’s a comment not a peer reviewed paper so learn to read between the lines.
HollyB,
Why should I? That’s a straw man and I disagree with the assertion you’ve created.
I disagree with you about debt. We have different opinions on the subject, that’s all.
Your post suggested that impoverished kids aren’t getting free lunches, but they are. I provided links about the lunch programs in both our countries. If you already know this then great we can agree and move on, sheesh.
I’m not engaging with your wilful ignorance or office politics, nor any of the male “banter” happening on here. It cuts no ice with me nor makes any difference to my life. tbh, I didn’t even read your reply as it will be more of the same rabbit hole nonsense and have been getting on with things that matter today.
HollyB,
Is that a promise?
You can ignore other’s opinions, it doesn’t mean you’ve made a compelling case for yours though.
“The Netherlands is pushing through cuts to healthcare spending. I suggest to them these are very bad ideas. Take a pause and think through this before you do something very stupid.”
They’ve already felt it and trying to do band aid fixes which won’t help.
It will be interesting to see on what the next steps by Nvidia will be. Especially in regards to RISC-V. Or maybe to instead invest a billion in open source drivers. Now that they are loaded with cash. I do have a feeling that if they would be more open in the past. That this deal would went through.
My bet: Sony will acquire ARM after Microsoft´s acquisition of Activision Blizzard.