Google, Microsoft, and Qualcomm Don't Want Nvidia to purchase ARM
When Nvidia declared its intention to buy ARM, it sent shockwaves car ecosystem. Within the PC world, if you purchase an x86 processor, you purchase it from Intel and AMD. In the ARM ecosystem, in contrast, there's a wide number of vendors who manufacture, design, then sell ARM processors. Google, Microsoft, and Qualcomm are particularly concerned about buying, and one of them is said to openly oppose it.
Bloomberg reports that three companies have requested that antitrust officials intervene to avoid the purchase, but not which really wants to get rid of the deal. Other companies potentially impacted by Nvidia’s decision to buy ARM are Apple, Samsung, MediaTek, Huawei, and pretty much anybody who ever shipped an ARM core in the past couple of years. Even Intel and AMD might be affected because both of them hold a leg license.
Up so far, ARM has either been self-owned or owned by a neutral company like SoftBank, which does not design CPUs and is not itself a person in silicon manufacturing. The major distinction between the ARM model and also the x86 model is the fact that ARM doesn’t handle any one of its very own manufacturing.
ARM offers both architectural licenses and “hard” IP licenses. An architectural license like Apple, AMD, Qualcomm, Samsung, and Intel all possess allows a person to construct an ARM-compatible processor having a custom micro-architecture from the customer’s own devising. Alternately, a customer can buy a license for one of ARM’s own standard chip designs, like the Cortex-A9, Cortex A-72, or Cortex-A75. An architectural license is more epensive than the usual chip license, but ARM offers both commercially.
The reason many organisations don’t want Nvidia to purchase ARM is that they’re afraid Nvidia can change aspects of the ARM ecosystem to profit itself. Nvidia, in exchange, has pledged to avoid this and promised the size its very own purchase, at $40B, needs to be considered a safeguard against inappropriate behavior.
“As we proceed through the review process, we're certain that both regulators and customers might find the advantages of our plan to continue Arm's open licensing model and be sure a transparent, collaborative relationship with Arm's licensees,” an Nvidia spokesperson said in a statement. Sources CNBC spoke to, however, expressed dubiousness that Nvidia could fully take advantage of its ARM investment without gate-keeping the present ecosystem in one fashion or another.
There are several plausible ways Nvidia might attempt to take advantage of the situation. The company might introduce a new CPU line with various branding and licensing terms. It could keep your Cortex family perfectly affordable but deprecate the Mali GPU family in support of an Nvidia-derived part in a higher licensing fee. Nvidia could theoretically create new extensions towards the ARM ISA specifically intended for processing AI workloads on its GPUs, but lock that specific technology implementation behind higher licensing fees. It could keep things running more or less because they do now but simply raise license fees. It could retire older CPU designs more aggressively, hoping of pushing people to adopt new hardware.
Nvidia believes it will likely be in a position to assuage these various fears once its proposed purchase goes before various regulatory bodies. “As we move through the review process, we're confident that both regulators and customers will see the advantages of our plan to continue Arm's open licensing model and ensure a transparent, collaborative relationship with Arm's licensees,” an Nvidia spokesperson said inside a statement. “Our vision for Arm will help all Arm licensees grow their businesses and expand into untouched markets.”
One way regulators may handle these concerns is to require certain concessions and promises from Nvidia regarding long-term ARM product, licensing, and pricing. Nvidia itself could probably soothe tensions whether it released more data on which it plans to do with ARM, post-acquisition. Nvidia is an ARM licensee, nevertheless its ARM business is centered on AI processing and the automotive market, with a little consumer crossover with devices such as the Shield TV.
There are a lot of ARM licensees who build CPUs while using Cortex-R and Cortex-M families. These embedded and real-time processors represent markets Nvidia hasn’t typically served using its own products, as well as their users could be understandably concern about Nvidia’s long-term plans of these spaces. Additional clarity on how the purchase would impact these customers, specifically, could possibly be helpful.
Finally, we suspect Microsoft, Google, and Qualcomm are wary of being held in an x86-like licensing scenario. One of the points ARM always emphasizes when discussing its very own strong points versus x86 is the fact that its customers enjoy much more freedom (and, oftentimes, better margins) than PC OEMs like HP, Dell, or Lenovo. Google and Microsoft have both launched chip development efforts this season, while Qualcomm recently bought Nuvia, a leg server design company.
Amazon hasn’t been mentioned during these stories, but it’s also deploying its very own ARM-based Graviton2 servers. Any significant change to ARM’s licensing model or its cost structure could impact a lot of customer long-term planning and cost analysis.
Nvidia clearly has a lot of legwork to do whether it really wants to convince regulators and its own potential future customers that it will be a worthy custodian to the ARM brand and business model. There’s clearly real pushback from this deal over the industry, and it’s not just originating from a few of the original ARM founders.
Top image credit: Nvidia