A new step, a new notch in the revolver and therefore a step in a curiously uncertain direction. NVIDIA responded to the UK CMA over its objections to its acquisition of ARM. The regulator expressed its doubts and concerns about the purchase, to which NVIDIA gave a series of arguments where “magically” Intel appears as an “excuse” to fix a series of problems. What does the blue giant have to do here?
If NVIDIA acquires ARM, if such an acquisition is allowed, the whole world thinks that the competitiveness and freedom of licenses for SoCs and Cortex processors will be over. What’s more, competitors fear that this is the first step towards a total monopoly, not only in computing as such, but in any existing ARM-based device (virtually anything with a chip is). Twenty-nine pages of explanations and arguments of which we will see the most important.
Softbank wants to leave ARM
The problem facing ARM as a company in itself is that rumors that Softbank wants to jump ship in the middle of an NVIDIA acquisition don’t bolster the company’s stock. This diminishes the value and especially the investment that could accrue to them, which NVIDIA alludes to the following:
As a publicly traded company, ARM may not have the financial resources to invest enough in start-ups. NVIDIA is particularly concerned that these pressures will lead ARM to deprioritize the data center and PCs and instead focus on its growing mobile and IoT businesses. The result would be a concentrated processor market largely controlled by Intel/AMD (x86), with the rest controlled by powerful and much more profitable ARM architecture licensees.
With this, NVIDIA not only makes it clear that the price will not go well and also leaves the CPU market to Intel and AMD, leaving its partners in a worse position, such as Qualcomm and Apple. Additionally, quoting Intel has a dual intent due to the following statements:
x86 IP is available for all ARM customers. Intel targets data centers directly, allowing data centers to use their IP to create custom chips. ARM’s most prominent data center customer, Amazon, is already one of Intel’s first IFS customers. Dozens of other customers have already engaged with Intel, which is “opening doors” to its IPs and causing a “significant shift in the way people think about ARM.”
Licenses and the purchase of ARM, reason for dispute?
It is logically true. Intel customers now want to use their IP, architectures, nodes, and technology to create their own ARM-style designs, albeit with some significant concessions, such as canceling future contracts, since one of said concessions has been rooting for years, something that Intel does not consider and these are more traditional agreements.
ARM is different, since you can lay off now or for a large number of years, so the contract controversy is in the air and NVIDIA makes it clear:
If the merged entity were to suddenly announce that it would renege on its contracts (and its commitments to regulators) and refuse to grant licenses in the future, licensees could still manufacture and sell ARM-based chips for the next decade, and even sell them for longer (because all ARM licensees have perpetual manufacturing rights). Licensees would have plenty of time to find alternatives, with no benefit to the merged entity for many years. Therefore, the merged entity cannot exclude ARM’s customers, even if it wanted to.
A new chapter that has undoubtedly been very interesting, because the legal ins and outs will determine the future of the CPU in this takeover of ARM by NVIDIA.
