Nvidia is Armed and dangerous
Nvidia’s $40 billion purchase of Arm Holdings poses big risks to Apple, Intel and others
Nvidia’s proposed $40 billion purchase of UK-based Arm Holdings poses significant risks to Apple, Intel and its employees.
Nvidia faces an uphill battle to convince regulators and partners that its purchase of Arm Holdings won’t radically reshape the mobile and computing industries.
UK-based Arm was bought by Japanese investment giant SoftBank in 2016, but was recently snapped up by graphics chip specialist Nvidia in a deal worth $40 billion. However, that deal faces a tortuous route through regulators, who will be worried by the fact that a chip design company driving the mobile industry has been bought by another chip maker, potentially jeopardising Arm’s cherished independence.
“The future of Arm is the future of the mobile industry, because every smartphone includes ARM* technology at its core, and increasingly so do mobile networks and data centres, too,” explained Ian Fogg, vice president of analysis at research company Opensignal.
“The concern for the whole industry will centre on whether Arm can maintain an independent business position and supply Nvidia’s competitors fairly, while being owned by Nvidia,” Fogg said. “This is one of the major uncertainties around how the business would work – if regulators and governments allow the deal to close.”
Analysts worry that Nvidia can’t maintain a level playing field among partners, such as Apple and Samsung, who are also competitors in some regards. “History shows that operating a licensing model in parallel with a business that competes with licensees rarely works,” said Geoff Blaber, vice president of research with analyst firm CCS Insight. *Note: Arm Holdings does not capitalise its name, but ARM stands for Advanced RISC Machine
“No Arm licensee can assume that neutrality is guaranteed in practice over the long term, so would have to review its strategic options.” If companies ompanies fear that Nvidia might favour itself or privileged partners over the wider industry, the entire licensing model could be at risk of collapse. Apple and Nvidia already have a problematic relationship, and although Apple has a perpetual licence for the current Arm tech, it will be uncomfortable relying on tech owned by a rival.
Such concerns might even see manufacturers look to alternatives such as the open RISC-V architecture, which is slowly gaining momentum amongst fringe developers. “It