Nvidia is in Talks to Acquire Arm

Posted on July 31, 2020 by Paul Thurrott in Hardware, Mobile with 35 Comments

A Financial Times report claims that Nvidia is in talks to acquire chipset designer Arm from SoftBank in a deal valued at over $32 billion. The report cites multiple sources.

According to the publication, Nvidia first approached SoftBank about two months ago after it learned that the latter firm was interested in selling off its Arm assets. It also notes that the talks could fall through, with SoftBank retaining Arm, as there are “a number of issues pertaining to a deal that would need to be resolved.”

SoftBank acquired Arm in 2016 and paid $32 billion for the firm. Arm’s current value is expected to be higher than that, so the $32 billion figure is a guess at the minimum asking price today. I could imagine Arm being worth more than $40 billion.

An Nvidia deal makes sense, though Nvidia is a relatively small company compared to the other obvious suitor, Intel. But like Intel, Nvidia’s business has been transforming in recent years from being PC-centric to being datacenter-centric. And while Arm’s designs may never see mainstream success on the PC, they will absolutely take over the datacenter market thanks to the chips’ lower power requirements and other efficiency advantages.

A Bloomberg report confirms the talks, and adds that the “two parties aim to reach a deal in the next few weeks” and that “Nvidia is the only suitor in concrete discussions with SoftBank.”

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Comments (35)

35 responses to “Nvidia is in Talks to Acquire Arm”

  1. olditpro2000

    Interesting. Have to wonder how this will change Arm licensing, if at all.

  2. dftf

    In related news, Financial Times reports Microsoft may be looking to purchase TikTok:


  3. VMax

    Lower power requirements are more or less irrelevant in a datacentre - performance per watt is key. It's no good using a quarter the power of a Xeon if you need five CPUs to match its performance.

    • wright_is

      In reply to VMax:

      Have you looked at the current supercomputer lists? ARM is doing pretty well, including the most powerful supercomputer in the world at the moment (by a long way).

      And low power is also very important in a datacentre. The two biggest costs are electricity and cooling (which is, again more electricity) so anything that can lower power usage, whilst maintaining performance is most welcome. And a lot of processors spend a lot of time idle, even in a datacentre.

      • VMax

        In reply to wright_is:

        ARM is doing pretty well, but it's not as though Intel isn't competitive there. Overall power usage is very important in a datacentre, obviously, but I was responding to Paul's comment that seemed to imply it was very important per-CPU. It isn't. The power required to support your workloads is what matters, and if a Xeon using 100 watts can do the work of five ARM CPUs using 25 watts each, you're still ahead with the Xeon. Performance per watt matters, watts per CPU doesn't.

  4. waethorn

    I bet Tim Cook is putting on his sad face right now considering they would be in competition with an nVidia-owned ARM instead of just its licensee.

    • cavalier_eternal

      In reply to Waethorn:

      I might be missing something here but how would they be in competition?

    • toukale

      In reply to Waethorn:

      If you've been following this space, you would have been aware of the fact that Apple's chips have little to do with ARM. The only thing that's ARM in their chips is the ISA (Instruction Set), it allows them to take advantage of the widest available tools for compatibility while charting their own destiny. I don't expect Nvidia to put up more of fight than what Qualcomm currently provide for the simple fact that Nvidia (unlike Apple) if they go a similar path as Qualcomm will need to make money of those chips, so costs will be the driving factor. Apple's chip group on the other will not be bound by such a thing, they will be free to spend what's needed to get the qualify of the chips they want. They won't have to worry about whether oems or vendors will pay for them.

    • bkkcanuck

      In reply to Waethorn:

      Apple use to own 43% of ARM, and ARM came to them but Apple is not interested. Apple does not use ARM technology anymore, just really the ARM instruction set (a set of commands like load (load from memory into variable), add, etc) which is just a RISC instruction set not much different than many other RISC instruction sets. I would not be surprised if there is not a clause in their contract that could be triggered if the company is sold... but worse case scenario - it would be much easier for Apple to transition off of ARM instructions to another home grown little-endian instruction set or RISC-V than the transition they are doing today. Buying ARM by Apple would be a bad business decision since the focus of ARM is selling to other tech companies - something that is not core to Apple's business plans.

    • wright_is

      In reply to Waethorn:

      Given that one of the stipulations of sale from the UK Government was that the licensing model has to remain and ARM has to be independet, ARM can only become a wholly owned subsidiary that does ARM licensing. Anything nVidia does directly within ARM would fall under the license, so they would still have to keep everything separate, as far as I can see.

    • steenmachine

      In reply to Waethorn:

      Once it was known that ARM was open to bids, I'm sure the folk at Apple had vetted (1) purchasing and (2) potential purchasers. Neither (1) nor (2) is known right now.

      I wouldn't worry about what face Tim is wearing.

  5. wright_is

    You don't mention that one of the stipulations from the UK government on the sale of ARM is that the licensing to third parties has to remain unchanged.

    I think this is one of the things that made ARM unattractive to SoftBank, once some of its other investments took a bath and it found it couldn't just change the licensing model as it wanted to generate more revenue.

    That would be a big stumbling box for Intel, possibly less so than nVidia, but that they would have to continue to license the intellectual property on FRAND type terms to their competitors, without being able to take a competitive advantage out of ARM for themselves (i.e. extending core ARM for themselves and licensing a lesser product to competitors) would make the deal hard to swallow for any chip design/manufacturing concern. nVidia might have ARM, but any competitive optimization would still have to be done outside of ARM, otherwise they'd have to license on that optimization, without prejudice.

    I think the UK would veto the sale, if nVidia (or Intel) could not guarantee the current independence going forward.

  6. datameister

    What would be interesting is if Marvell bought them.

    • wright_is

      In reply to DataMeister:

      They already make good ARM chips.

      The problem with any chip manufacturer buying ARM is the stipulation from the UK government that any sale must respect the current business model or licensing the technology. That means any new designs need to be licensed out, so they still need to keep the ARM Holdings separate from their chip business.

  7. madthinus

    I love nVidia, they make great products. However, they are probably the worst company to take stewardship of ARM. nVidia corporate culture is the Borg mentality: Assimilate. I don't see them maintaining the status quo, nor the licensing. They buy companies to acquire the technology and include it in their own products, not for others to benefit.

    • wright_is

      In reply to madthinus:

      Except the sale of ARM Holdings has the restriction that the licensing model has to stay the way it is. That was the UK government stipulation for letting ARM be sold.

  8. Pbike908

    Makes a lot of sense. I would be surprised if there were antitrust concerns. Other than perhaps Mediatek, not sure who else this makes sense for that could get by Antitrust issues. I am sure Huawei would LOVE to get it, however, there is no way would get past regulators.

  9. beckoningeagle

    Interesting. We may have a renewed Nvidia vs AMD. X64 with integrated GPU vs ARM with integrated GPU.

    With Intel lagging behind once more.

  10. jchampeau

    Remember that browser extension that changes the word "literally" to "figuratively?" It would be more complex than that, but I'd like to see a similar extension that makes "Arm" lowercase and modifies sentences to make it sound like SoftBank is selling a body part. "...Firm was interested in selling off an arm" and "SoftBank grew an arm in 2016" would be hilarious to read.

  11. BigM72

    Is there a world in which this would let Nvidia take over supplying the mobile market from Qualcomm?

  12. F4IL

    Once upon a time, nvidia were being denied to get an x86 license by the current duopoly and launch their own chips.

  13. aelaan

    Is ARM not just a framework? Like it is not something that can be easily patented I would think - I believe too that this is why the Axx of Qualcomm and Apple and who knows others are working with the same framework for their chips. So if I use it for a chip I would own x percent to the patent holder of the ARM framework, or am I seeing this wrong?

    • SWCetacean

      In reply to aelaan:

      No, Arm is an Instruction Set Architecture that is licensed out by Arm Holdings to customers (e.g. Qualcomm and Apple). Those customers do not have any ownership of the Arm intellectual property. They just pay for its usage.

    • wright_is

      In reply to aelaan:

      ARM sells a license to its RISC ISA, as SWCetacean says. The companies, like Fujitsu, Ampere, Marvell, nVidia, Qualcomm, Huawei, Samsung and Apple, buy a license to use that RISC ISA and then they tweak it for performance, which Apple seems to be doing better than the rest of the mobile industry at the moment - although Fujitsu currently makes the fastest ARM server chips.

  14. SRLRacing

    Nvidia is an interesting potential buyer. On one hand they are a scary suitor due to their affinity for proprietary solutions such as the NVENC encoder, G-Sync, DLSS, RT Cores, and much more. This could potentially damage the ARM licensing ecosystem putting the likes of Apple, Qualcomm, and others at a severe disadvantage. On the other hand that love of proprietary solutions could be the shot in the ARM that gets Windows on ARM to an acceptable state with hardware dedicated to accelerating the legacy code base.

    • wright_is

      In reply to SRLRacing:

      One of the stipulations for the sale of ARM from the UK Government is that the licensing ecosystem can't be changed. I think this is one of the reasons that SoftBank wants to dump ARM, some of their other investments tanked during Corona and now they find that that stipulation from the UK government means they can't just tweak licensing to recover revenue lost by other investments. nVidia would end up with the same albatross around its neck. They'd have to still sell everything "ARM" as it is sold now, any real competitive advantage would still need to come from nVidia's optimization of those ARM designs, once they were outside the view of ARM (the business). That would be a regulatory nightmare.