SoftBank’s plan to sell Arm to Nvidia is hitting antitrust wall around the world | Hacker News Reader

SoftBank’s plan to sell Arm to Nvidia is hitting antitrust wall around the world

asia.nikkei.com

355 pointslawrenceyan188 comments

> The CMA will look at the deal’s possible effect on competition in the UK. The CMA is likely to consider whether, following the takeover, Arm has an incentive to withdraw, raise prices or reduce the quality of its IP licensing services to NVIDIA’s rivals.

This is from the UK's Competition and Markets Authority (UK's antitrust regulator) web page [1] on this takeover and captures the key issue precisely.

Nvidia has every incentive withdraw, raise prices or reduce the quality of its IP licensing services to NVIDIA’s rivals because this would help NVIDIA's own products (current and future) and NVIDIA makes a lot more on its own products than Arm makes on licenses.

I'd also add that there is almost no way that this could be properly policed post takeover.

[1] https://www.gov.uk/government/news/cma-to-investigate-nvidia...

I can think of no worse owner of ARM in this industry, with the possible exception of Qualcomm.

If NVidia indeed wants to have a real foothold in the CPU space, we would all be much better off if they went the RISC-V route.

> we would all be much better off if they went the RISC-V route

Or indeed just license ARM like everyone else. It's not like they can't use ARM without buying them.

Exactly, which raises the question why they are interested in buying Arm to begin with. A public statement is in the article:

"With its proposed acquisition of Arm, NVIDIA will be able to turn new AI possibilities into realities much faster."

Which doesn’t make much sense to me, unless they wish to change aspects of Arm that is currently outside of any license.

>which raises the question why they are interested in buying Arm to begin with

Softbank needs to liquidate some of its asset due to the genius work of con-man WeWork losing them tens of billions. The original purchase price for ARM was something like 100 - 120 P/E in 2016. And the current earnings are still 100 -120 P/E with no immediate or short term profits growth. The prospect of the company's fundamentals and future growth hasn't changed since 2016.

Who in the right mind would want to buy a company for P/E 100+ with no visible growth factor?

And since no one wants to buy it, Softbank had to find a buyer. Softbank is one of the largest shareholders in Nvidia. And with its current stock price that was a perfect fit.

Of course that is ignoring Nvidia could have said No. I guess Softbank could decide to liquidate its position on Nvidia instead.

googling "softbank stake in nvidia" gives me "SoftBank Sells Entire Nvidia Stake" from 2019: https://www.wsj.com/articles/softbank-sells-entire-nvidia-st...

Is your information about SoftBank being a major shareholder in nvidia up to date?

Thank You for Fact Checking. Looks like I was wrong about Nvidia ( My memory might have mixed up a few things ). But the ARM P/E point still stands.

Feeling bad for spreading misinformation. :(

I will need to double check on Son, Softbank and Nvidia again.

I think the outcome should be that Arm should have less control over who has a full license with the ability to add instructions etc.

It is somewhat ironic to me that, it is the software layer made available by gcc and clang that actually makes these billion dollar cpu vendors viable.

> It is somewhat ironic to me that, it is the software layer made available by gcc and clang that actually makes these billion dollar cpu vendors viable.

CPU vendor usually contribute to both GCC and Clang these days.

NVIDIA has already released customized ARM chips, like Denver: https://en.wikipedia.org/wiki/Project_Denver

"Denver's binary translation layer runs in software, at a lower level than the operating system, and stores commonly accessed, already optimized code sequences in a 128 MB cache stored in main memory"

When they can just buy ARM licenses and develop the same technology? That seems rather disingenuous.

They might want to make changes to the standard ISA which only ARM can do currently.

But it's nVidia. No way they are going to do anything good.

Doesn’t the ARM ISA license already allow for extensions? I know Apple’s chips are full of them.

Apple's extensions are non-standard. Nvidia could make changes to the standard itself, not extensions. How much money this is worth I don't know.

Sure but those wouldn't be standard instructions that other people have to implement.

Is a custom core required to support the full standard instruction set? I thought I could license the rights to have my own, say, A53, and then I’d be able to customize it (as long as I don’t call it an A53 core). Is that not the case?

I wouldn't be surprised if their licensing terms require your chip to pass some kind of compliance test for the standard ISA, but probably only the licensees know that. I'm sure you can't use the ARM trademarks if it isn't compatible thought - that's pretty standard.

Nvidia already has an ARM license, even.

And despite that, Tegra isn’t all that great compared to Qualcomm and Apple.

Why can’t NVIDIA make their own M1 competitor as it is right now?

Because that requires investment. If they make that investment and are wildly successful at taking market share from x86 then ARM will become a much more valuable company. Buying ARM allows Nvidia to capture that value.

This is a real problem when some of that investment is porting/tuning various open source projects to make them run well on ARM. Such work would benefit the whole ARM ecosystem, including competitors who sell ARM based chips. At which point, owning ARM starts to look sensible.

Having an ARM license has zero relationship with performance.

An ARM license is only for unit cost benefits. Nothing else.

Also strategic reasons. If you own ARM you can dictate the direction they're focussing on a lot more.

The Tegra's aren't that bad are they? The CPU in the Xavier seems pretty decent, and it's only on a 12nm process. If they can get that shrunk down, it'd probably run even better.

But if they own it they'll have the sweet licensing money coming in.

Oh right, what B schools call, 'extracting the economic rents'. It makes sense why they'd want to purchase ARM, but to pay for the price/future earnings of this acquisition, I guess they'd need to increase the price of future licenses

Which wouldn't work, the whole ARM business Model has safe guards for their customers so they cant suddenly rise the price and extract as much as they could.

ARM is a first and foremost a British Company, not very good at extracting every single ounce of profits like their cousins.

I’m not sure ARM could have grown to the point it has without those safeguards. If they were to extract every ounce of profit their customers probably wouldn’t have picked them. Their model has been far more successful than most of their contemporaries.

But it's slower. What about those quarterly profits‽

They already have ARM SoCs which are used in their own Shield TV and other devices.

ARM is unique that there aren't many companies that could own it and it being a raw deal, it would have to be a company that doesn't have rivals in semiconductor or hardware space, so that basically rules out even buyers like Google or Microsoft. What that leaves are investment companies like Softbank or Berkshire, everything else is hurting someone.

Or just let it go public. It doesn't have to be owned by anyone else.

It was public, it went private when Softbank bought it. No reason it can't go public again, though.

I think it's more of Nvidia wants to get into ARM's sales channels. CPU side of things is additional benefit.

The things is that NVidia by being a competitor in many spaces, would wreck those very same sales channels.

I wondered about that. If AMD previously wanted to leverage their experience with Ryzen/EPYC to do something with an ARM core, would they now balk?

They’d just do RISCV instead

> I can think of no worse owner of ARM in this industry

Can you further expand on this? I didn't see any evidence or even opinions backing this in the comment.

ARM made an architecture and CPU/GPU designs for others. They really had no stake in the chip making game, instead having others - Samsung, Apple, Qualcomm, Huawei, Mediatek, Rockchip, etc make the chip (that being a list of competitors for Nvidia). Their business model was in making the ARM ecosystem available for all manufacturers (including Nvidia) in order to sell licenses. This, I think, is the primary reason ARM chips dominate at this moment.

Nvidia as a company is notorious for keeping a tyrannical grip on their customers, systems, & hardware. CUDA is a wonderful software stack, with massive hardware adoption... tied very strongly to Nvidia hardware. Nvidia GPUs are wonderful pieces of hardware... with frustrating Linux drivers, dogged resistance to open-source driver efforts, & a history of resisting mainstream collaboration & doing things themselves (their EGLStreams vs DMA-BUF/GBM, which, after half a decade+ of making Nvidia on Linux semi-useless, is finally showing signs of retreat. i'll allow that their devs may have had some points, perhaps?). Nvidia is one of the only companies with a proprietary interlink system, NVLink, whereas historically IBM (OpenCAPI), HP (GenZ), AMD (not anymore alas, with HyperTransport giving way to Infinity Fabric, so sad), great collaborations (CCIX/CXL), countless others promoted & used open interlinks, neutral technology that enabled & drove innovation & jump started the personal computer revolution ("gang of nine"[1]). Nvidia releases no documentation for their chips. If you buy a Nvidia computer- very powerful, energy efficient dev boards- Linux4Tegra is expected, woe be unto those who try to venture out & use the common Linux distros they already know & love.

In Stratchery's wonderful write up of how quixotic & weird & strange the Nvidia acquisition of ARM seems[2], Ben highlights CEO Haung's core interesting idea of this acquisition:

"Arm’s business model is brilliant. We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand Arm’s IP licensing portfolio with NVIDIA’s world-leading GPU and AI technology."

And I'd love to expound on how weird, how strange this sounds. But Ben's done it far better than I could:

"Notice that last bit: Huang is not only arguing that Nvidia will serve Arm customers neutrally, but that Nvidia itself will adopt Arm’s business model, licensing its IP to competitive chip-makers. It’s as if this is an acquisition in reverse: the $318 billion acquirer is fitting itself into a world defined by its $40 billion acquisition.

Color me skeptical; not only is Nvidia’s entire business predicated on selling high margin chips differentiated by highly integrated software, but Nvidia’s entire approach to the market is about doing what is best for Nvidia, without much concern for partners or, frankly customers. It is a luxury afforded those that are clearly best in class, which by extension means that sharing is anathema; why trade high margins at the top of the market for low margins and the headache of serving everyone?"

I would LOVE to see Nvidia acquire arm & gain a soul, figure out what it means to innovate, openly, to drive tech forward while working hand in hand with others to see it get adopted & grow & thrive, in ways far beyond their own limited control & vision. Nvidia is up to great things, has such an amazing mastery of high technology that so few share, building amazing chips, releasing amazing products. They are so integrative, building great chips (gpus & cpus both), building ways to make chips work together (nvlink), building consumer electronics (shield tablet, shield tv), building ultra-dense servers (dgx).

But they do not share. "Take what you can, give nothing back!" is how a lot of people feel about Nvidia, and on many days I share that view. It's so hard to imagine. It would be such a change.

Ben tails the end of his write-up with a wonderful question posed to Huang, why does Nvidia need to own ARM? Huang comes up with great answers, seems very thoughtful, and I am excited to see his future, as he talks about it happen. But it would not be Nvidia as we know it any more doing this. The company would need to be reborn, be something else. Huang seems to get that, he sees and says that, but it seems just so much more probable that the real end would be a miserly, sad fate for ARM, performance going up yes, but control & closeness shutting down the relevance & interestingness & availability & affordability.

[1] https://en.wikipedia.org/wiki/Extended_Industry_Standard_Arc...

[2] https://stratechery.com/2020/nvidias-integration-dreams/

NVLink is part of OpenCAPI since version 3... in fact OpenCAPI 3 is based on it.

Don't forget to mention Nvidia's really weird license where they will tell you post-purchase what you can and can not do with their products and associated software.

ARM makes their money by licensing the design to other huge companies, who then integrate the processor with other peripherals and manufacture it. They have no interest in extracting money from the end user, instead the documentation is readily available. In comparison, Nvidia, for example, sells you a video card, then you have to pay them again for a license to do deep learning. Oracle requires the end user of Java to pay a license to use the JRE. The fear is that if Qualcomm or Nvidia buy ARM, they're going to turn ARM into a similar business model where they try to nickel and dime the end user for everything.

How about Broadcom (assuming they'd be big enough)?

Yeah, that would be pretty shit. But Broadcom has been reinventing itself as an IP company, so at least it wouldnt be a terrible match.

They already sell hundreds of millions of units of their SoCs - the Nintendo Switch runs on an (ARM-based) NV SoC for one example and has sold over 70 million units.

Lots of Nvidia SoCs in cars too, Tesla's being one example.

"Why don't they just switch to RISC-V?" is the new "This will be the year of Linux on the desktop".

Intel or Oracle would be two.

Intel would also be a bad merger.

I can think of one worse owner of ARM: AMD. Make that two: Intel.

I think this acq was about this: back in the old days Masayoshi Son would have found a knife in his room and been expected to use it on himself if he hadn't been able to find a lot of money quick to handle redemptions in the vision fund.

Thus whoever bought ARM was doing him a big personal favor that would ultimately get repaid. NVIDIA does not need or want ARM but Son pretty much owes Huang his life now.

(Patronage Networks are a good master narriative for how any society works.)

I don't understand why Softbank won't just put it back to the public market and list on the LSE.

>I don't understand why Softbank won't just put it back to the public market and list on the LSE.

Softbank is a grossly mismanaged shitshow fueled by an endless money well of Saudi money.

Don't expect it to be behaving rationally.

This actually seems rational to me. They grossly overpaid for ARM, and selling it on the public market may well end up being another huge and embarrassing write-down. On the private market, though, they had a shot at finding a buyer to whom ARM was worth more than its value as an independent company.

Of course, given the kind of company that ARM is, any such buyer is going to be, almost by definition, an antitrust situation. So maybe it never could get past regulators. But, from a purely self-interested standpoint, it makes sense for them to try.

Good Lord, that's a great idea. They'd be able to sell the shares in no time. Soon as it hits public I'm sure a ton of folks who just invest in everything semiconductor would just jump in.

I've been avoiding SoftBank because they've got so many other risky ventures, putting money in company at large seems kinda volatile.

I've been checking the semi conductor space. What semi companies aren't overvalued with a decent P/E ratio right now? Was thinking to just take an ETF like SMH[1], but wondering if there were a better choice. TSMC, Applied Materials, ASML, Nvidia, etc... had crazy run and I'm wondering if they can keep growing that much in the next years.

[1] https://www.vaneck.com/etf/equity/smh/holdings/

Intel is still rather undervalued. PE of 11, huge amounts of cashflow, one big chip win and they're back.

Intel just lost all engines in-flight. They're still flying, yes, but gravity will do its thing.

We keep reading this but Intel is not just CPUs... and the CPU are currentky not the best but not that bad either.

Intel is still capacity constrained, no less. I'm not saying they make the best CPUs, my last purchase was an AMD Ryzen, but this idea that their demand will fall of the face of the earth assumes that other fabs have the capacity to pick up the slack which is verifiably untrue. Merely due to their existance they'll have time to turn it around.

Disclamer: long intel, a few thousand shares at $47. not enough to need to pump the stock.

Yeah, Intel needs some major direction changes before I'll be comfortable investing in them.

The proximity of 'lost all engines in flight' and 'major direction changes' in this thread suggests that even if those major direction changes materialize it may not be good news.

In this case the markets seem to have priced in a low probability of Intel getting that big win.

P/E isn't everything. People know those earnings are going to tank very soon.

>I'm sure a ton of folks who just invest in everything semiconductor would just jump in.

I'm sure a ton of folks would just jump in because everyone would be jumping in.

Even better - direct listing on WallStreetBets.

A potential merger with Game Stop?

You can get better money if you sell a strategic asset as a whole rather than throwing it onto the public market & all the red tape, PR and control dilution that entails

ARM is 100% equipped to deal with red tape and PR; it was public until 2016 when SoftBank brought it.

Note quite what I meant.

In this context being private is a huge advantage. Less filings and less shareholders and less publicity gives you a lot more room to manoeuvre.

The problem right now is this strategic asset is so strategic for everyone, Softbank can't sell it to any single entity unless there's some guarantee of ARM's continued independence and impartiality.

2020 was a long year - this was just 6 months ago: https://www.spglobal.com/marketintelligence/en/news-insights...

Absolutely. I really would like to understand why Soft Bank don’t do this. UK gov should do everything it can to encourage.

They will have a hard time to try and convince the public to buy ARM's shares at P/E 100.

Why would the Chinese authorities accept this deal if it means ARM will be on American hands and thus subject to arbitrary export controls (as examplified with Huawei, now possibly Xiaomi)?

China and Allen Wu are trying to steal ARM China from under SoftBank in the first place. SoftBank is totally screwed no matter what happens. Allen Wu has decided that he can ignore ARM INC, and China will happily go along with anything he wants as long as it means that ARM China is a Chinese directed institution.

And the Chinese regulators will be happy about a deal where nvidia buys arm but either spins off arm china or just agree to give arm china the freedom to do whatever without oversight from HQ.

Because SoftBank is Japanese and they’d have no choice?

You're severely underestimating the Chinese government's ability to sanction nvidia and softbank if they went forward without their approval.

in which way? china seems more like a toothless tiger in this regard

I’d imagine that a Chinese sanction on ARM chips would cause quite some trouble for all the manufacturing of electronic devices that’s happening in China, and that’s even without considering the large consumer market that China is.

Yep,

When Western Digital acquired HGST, the corporation was 'obliged' to hold off full integration for 2 years due to the requirements of the Chinese government:

https://www.theregister.com/2015/10/19/mofcom_says_yes_wd_hg...

China successfully blocked the sale of NXP to Qualcomm, as said in the article. Neither company was Chinese.

According to this[1] 30% of Nvidia's sales are in China. Arm's numbers are similar. If China banned the sale of Nvidia GPUs or added some punitive tariff that'd hurt quite a bit.

[1] https://www.thestreet.com/investing/stocks/nvidia-diversifyi...

But does China have an alternative to ARM CPUs and NVIDIA GPUs?

They tried blocking Github in the past and it did not actually work well.

I imagine something like blocking the production lines of multiple factories would just ensure that these are relocated elsewhere.

ARM's products are predominantly IP and China has a famously lax attitude towards enforcing western-style IP laws.

China wouldn't need an import ban - just a ban on paying license fees.

That can work both directions. If China is going to disregard all US intellectual property rights, then the US can do the same to China (which is the world's largest manufacturer and has at least as much to lose as the US does over such an approach in the coming decades as they seek to move into high value manufacturing increasingly).

That means as China produces its first leading semiconductor products, US companies are free to reverse engineer them and immediately begin producing them (whether in Vietnam, Mexico, Taiwan, South Korea, India or Arizona and Texas), all without compensating China a dime.

As China begins producing its first leading pharma/biotech products, US companies are free to steal all IP from those companies and sell it as their own all around the world, with zero compensation to China.

And so on.

China is going to become the world's largest economy and will soon have the most to lose (if they don't already). Let's see how they like it when the tables are turned.

US has massive IP portfolio advantage, it will lose more. IP intensive sectors account for 1/3 of US GDP and affects as much employment. China is very far away from that and even if she creeps towards or surpass parity, these sectors will employ relatively smaller fraction of total population, i.e. it will affect Chinese society less - these nascent sectors may mature slower or not progress, versus US/west already heavily invested would actively regress. These scenarios have very different ramifications.

It's in both US/west and Chinese interests to maintain general IP racket and deal with sectors of exception. China is obviously not going to respect IP that it is willing to license if said denied via sanctions / geopolitical posturing. Just like military R&D, lack of access = valid rationale to espionage and undermine. West sanctions arms export to China after Tiananmen, now China has massive indigenous military industry. Semiconductors seems no different. Would have been better to draw out reliance on foreign hardware.

Escalating the tensions is not a solution; it just makes it harder down the road to find actual, workable solutions.

Bluntly put, do we want a trade war with China to go hot?

I think we do. They've had a very favored status for decades now. I didn't like a much of what Trump did, but playing hardball with China, I definitely liked that.

MIPS and RISC-V for CPUs; AMD, Intel, and others for PC and embedded GPUs.

China has already sunk in billions into RISC-V. So they are working on it. And it would not suspires me they will weaponise it against ARM.

The winner would be us, as we have more to choose from, and since RISC-V is open nothing much will stop non-Chinese manufacturers from also making their versions. We may see a reverse version of the familiar Chinese tech cloning in this case.

NVIDIA has significant board design and assembly work in China. Plus they would not want to be locked out of a large economy. A good chink of ARM's revenue is probably already coming from China and sanctions could hurt that as well

C-word is probably a typo, but flagging anyway.

You are truly the chink in this person's armor.

Maybe you should invest in a dictionary instead...

Sotbank holds massive investment in China. For instance Softbank own 25% of Alibaba (this 25% are way more valuable than ARM). So yes they do have a large power over Softbank not complying to their decision.

I have to agree, if companies based in China can't license ARM chips (like Rockchip, Allwinner) and can't manufacture ARM chips then what are they going to put into all their electronics from Xiaomi, Huawei etc?

They'd have to start manufacturing their existing ARM design without license (good luck exporting that).

Have you noticed that there's a scramble to RISC-V?

Wait till China pulls a hong kong on taiwan. It will be clearer...

Pulling that on a strategically located island with its own government and a military that has been preparing for that exact eventuality will be a LOT harder than with Hong Kong.

Just wait until something that might never, to happen. Ok.

They could ban the manufacturing of anything with an ARM core, in China, in the extreme case.

That would be an epic own goal. The west is desperate to reduce chip manufacturing reliance on China.

Can you tell me which chips are produced in PRC? (Not Tawain and TSMC)

The chips might be mostly produced in Taiwan, but they are mostly assembled into products in China. If China banned use of ARM chips in products that would disrupt basically the entire smartphone supply chain. Of course, this would greatly harm China too. But they can still use the threat of doing without actually doing it.

The majority of Samsung's phones are made outside of China (eg their huge presence in Vietnam). It can obviously be done and done affordably. Samsung wouldn't do that just for fun. If Samsung can move their assembly out of China, so can Apple.

Don’t forget that Apple is slowly ramping up its manufacturing presence in India, in addition to Vietnam mentioned by another comment, to further mitigate its over reliance on China.

https://indianexpress.com/article/explained/apple-india-manu...

This is more spreading out final assembly to dodge tariffs, both US and Indian. Losing out on assembly is minor compared to moving up component value chain. Queue meme about China making $8 per iPhone 3G (3% of cost). It grew to $100 for iPhone X (25% of cost). Reliance is growing.

Samsung's somewhat exceptional in that they have a lot of domestic high end component manufacturing. But even they've been increasing Chinese manufacturing via ODMs for lower end models while media was talking about their move to Vietnam. I think their high end models still sources ~30% from China.

I'm sure Apple could, but not overnight. I'd imagine it would take them at least a year. Which would make for a pretty major disruption.

That’s a complicated geopolitical question.

SMIC produces lots of chips. But if China tries to clamp down on ARM production, it will hurt TSMC.

The US can raise antitrust objections to EU companies acquired by other EU companies.

Legally, nobody need to obey the objections, but if the merge still happens, the new company might discover doing business in the US has suddenly become much harder :-)

The US even subdues foreign governments to get out of contracts with the companies the US doesn’t like.

If you read the article it appears that the Chinese authorities have considerable powers.

I wonder why they don't just do a direct listing and sell it to retail investors.

Because it’s worth more to nvidia would be my guess?

A good indication of an anti-trust violation, if there ever was one!

By this logic, every acquisition involving a premium is a an anti-trust violation.

I mean every consolidation is bad for competition in the first order. There are just sometimes higher order ameliorating effects.

Every consolidation isn’t necessarily fundamentally bad. Sometimes consolidations result in cost reduction synergies that partially get passed back to consumers. Elimination of inefficiency is good for everyone including the consumer. Of course there’s downsides of consolidation but I think there are upsides too.

An example that comes to mind is Tesla’s acquisition of SolarCity. Another is Amazon’s acquisition of Twitch or Google’s acquisition of YouTube (it seems prohibitive to run video streaming services sustainably/profitably without the infrastructure efficiencies of Amazon/Google).

I think that's exactly what the author meant

> consolidation > cost reduction > synergies > passed back to the consumer => second order

fucking up your competitors => first order

That's generally why you have to guess at the long term effect of any merger. "Will the consumer benefit only in the short term and the diminution of competition will end up hurting them in the long term?" is the question regulators should answer.

Yes.

That is a good question; I assume the answer is that they cannot get a 40B valuation if they IPO.

I think they would easily get a 40B valuation on an IPO.

People know that ARM is used in all smartphones and after Apples M1 and the growing usage in Servers many believe that ARM is the future.

Also - with an IPO, customers of ARM like Apple could easily buy shares of ARM...

Probably the reason why Apple didn't bought ARM is because they know they wouldn't get through the competition authorities.

But with an IPO, Apple and other customers could buy something like 9 percent of ARM...

M1 is arm instructions apple design.

This still requires a fairly pricey license from Arm to use the ISA

Apple helped found ARM, I would be very surprised if they didn’t receive favourable terms on an eternal license.

They could also simply hire the ARM employees for a lot less than $40B over the near future.

That doesn't really help them all that much, at least not for the reasons why owning ARM could be useful: the IP.

My understanding was that Apple already reimplemented large parts of the IP and that they are now mostly a licensee of the ISA.

Apple's ISA can become more and more divergent from Arm and it wouldn't matter. Apple controls the entire software stack that runs on their hardware.

I think Apple is bound by contract to respect the original ISA (except perhaps the parts they use internally and don't expose external developers to). Forcing external parties to use a translator instead of machine language directly could be one approach to circumvent this.

Also, is not the whole value in using Arm ISA, the ecosystem behind it? If Apple starts diverging from the standard, then it cannot benefit from the existing ecosystem and neither can a software dev say develop on Mac and deploy to graviton. I think it is big lose lose if Apple diverges from standard.

Apple never used any 64-bit cores from Arm. Their own Cyclone was developed in parallel with Arm's Cortex-A57.

I mean it was valued pretty close to that on the public markets before SoftBank bought it, and tech shares in general have appreciated massively since then, so I think they could get a decent price at IPO.

That is my intuition too; ARM is a wellknown name and semiconductors is a hot sector at the moment, in particular with a shift away from X86 for personal computing.

However they probably cannot sell all the shares at an IPO and get the full 40B in cash which maybe is what SoftBank wants at present.

You must have not seen the trajectory equities are on now days. 40b would be an absolute joke to achieve by end of year.

I hope Arm continue to be independent, it's too important

>In announcing the agreement, the two companies, citing a need to get the green light from regulators in many countries, including the U.K., China, the European Union and the U.S.,

It's hard to believe U.S. authorities weren't consulted by Nvidia before taking credible action towards this deal, I doubt whether there will be even real hurdles from the Govt. for Nvidia as ARM is a strategic asset. For the same reason, I don't see hurdles from U.K., EU to last long either.

But there's a new administration now and if anti-trust did take it up due to pressure from Apple, Qualcomm and likes then there will be real test between free-market regulations vs national interest.

The deal is not finished. It has explicit condition covering disapproval.

Nvidia buys ARM only if the deal gets regulatory approvals approvals. If not, the deal is off.

>The proposed transaction is subject to customary closing conditions, including the receipt of regulatory approvals for the U.K., China, the European Union and the United States. Completion of the transaction is expected to take place in approximately 18 months.

https://nvidianews.nvidia.com/news/nvidia-to-acquire-arm-for...

If Nvidia saw the opportunity to buy Arm they would make an offer and then try to get through antitrust regulators - and regulators very unlikely to give a green light in advance of a deal being announced.

The UK regulator has already set out very credible reasons why the deal might be objectionable in advance of doing their investigation - and those same reasons apply in the US and EU too - so every reason why

https://www.gov.uk/government/news/cma-to-investigate-nvidia...

ARM's revenue is stagnant. it may not be a sustainable business on it's own.

Nvidia wants access to ARM's large customer base to sell it's own IP in GPU, AI accelerators.

Intel had a dominant position x86 for decades which they also licensed to AMD.

However, today we have open RISCV, open MIPS & several huge tech giants and cloud computing providers willing to invest in these alternatives. Not to mention that several of these like Apple have a perpetual ARM license which will not be affected by this acquisition.

This should be a welcome move especially for those who are looking for greater investments in RISCV.

So you're saying it's great because Arm's customers will be forced to abandon their investment in Arm products.

In other words dreadful for Arm's customers and their end users.

(I want RISC-V to succeed but this isn't the way to do it)

I couldn’t find a link to Hermann Hauser’s open letter to the UK prime minister in the article. Here it is:

https://www.savearm.co.uk/

Thanks. Interesting proposal at the end:

> The obvious and highly desirable alternative to the Nvidia deal is for the government to use its convening power to lead a syndicate of ARM licensees, UK pension funds and other institutions to take ARM public on the LSE + NYSE or Shanghai Star market and take a golden share so that we are never again in this invidious situation of having to fight to keep our own UK technology assets.

What’s in your opinion the reason Arm became the defacto choice for embedded systems? (And now making ways to general computing)

In what ways was it so much better than MIPS that it virtually wiped it off the board?

You can hear it from John Hennessey of MIPS fame himself.

"We made a mistake. We didn't realise how important the cellphone market was"

https://youtu.be/3paiCK3dlK0?t=3016

Just to add on a more detailed level I think it was Thumb with its better code density that first got them into (Nokia) cellphones. Also, I think Arm long explicitly avoided competing with Intel which they saw (then) correctly as a losing strategy.

Very interesting, thanks. The guy to the right of him is completely in denial. He was so confident MIPS "will win in the end"

Interestingly, I think Arm has become more MIPs like over the years - dropping some of the features that made it distinctive. In the 'Arm edition' of the Patterson and Hennessey book there is a slightly wistful comment that Arm now looks a lot like the original MIPS - so maybe MIPS has won after all!

The fact that many semiconductor different companies brought ARM based products to market, each with their own set of peripherals, hardware reference designs and SDKs targeting different verticals (in different ways). This huge variety of available off-the-shelf designs makes it possible to make cost-effective products with low investments and fast time-to-market. A CPU core alone is not enough, one needs the ecosystem and ARM understood that from very early on.

Suppose if the sale did not succeed, what will happen to Nvidia's high-flying stocks partially caused by this merger? I don't own Nvida stocks, just be curious

IIRC, the stock is actually down since the announcement. Nvidia is buying ARM because of its high stock price. The stock already ran up thanks to the AI boom.

Honestly, I work at NVDA and I think the deal is dumb. I don't see what benefit it brings to us. The industry is beginning to move away from ARM, so buying yesterday's technology seems like a bad move.

You're right, it does not seem ARM-acquisition helped or damaged NVDA stock both ways over the past 5 months.

"Moving away from ARM", to where? X86 does not seem like a good destination, RISC V is not there, MIPS/AI-chips etc are not a trend either, I honestly don't know where else the CPU industry can move to.

If they want liquidity, sell 2/3 on the open market. Allow NVIDIA etc to buy up to 10% with their own stock instead of cash. Softbank isn't going to clear regulatory hurdles in a monopoly premium sale.

The UK government should buy back ARM, it’s a strategic national asset, as is IMG.

It's not really "buy back" if you never owned the company in the first place though. In any case that is not really the way western governments handle strategic companies. The US government is not acquiring Intel or Lockheed any time soon, they just limit where it can export their products to.

> The US government is not acquiring Intel or Lockheed any time soon

Well that's because the US government aren't worried about Intel being acquired by anyone else outside of the US anytime soon. Secondly, there's enough competition in the valley that even losing Intel wouldn't be a disaster for the US. The 2 situations aren't really the same.

Sure, but there are other, much more politically tenable ways to keep Intel under US ownership than nationalizing the company.

> In any case that is not really the way western governments handle strategic companies.

Except for in Scandinavia where that is how they do (more so in the past than now.)

I don’t see this as likely.

The current Conservative government have large factions that are ideologically opposed to state interference in the free market.

Historically they’ve preferred to promote a free market for foreign companies even at the expense of local firms.

For example, this has happened in 80s and 90s when the UK had a lead in optical telecommunications and the Conservative government locked BT out of the cable TV market in favour of foreign competitors NTL and Telewest.

At the time these cable companies were using old style coax and wouldn’t have been able to compete against BT using state of the art optic fibre that only BT had.

With savings from brexit I'm guessing?

That would then be nationalization and thus the opposite of the course that Thatcher had initiated. We are currently seeing such tendencies with the British Railways, but this is likely to remain the exception.

They seem to be changing their position on this:

https://www.theguardian.com/business/2020/jul/03/uk-buys-sta...

Interesting, thanks. But I would consider the satellite system also a special case like the railway system. They're talking about “sovereign global satellite system” and “strategic opportunities across a wide range of other applications”. I'm not sure whether one can derive a rule from it.

The UK govt is made up of the people too stupid to refuse the job after the brexit vote. Their strategy is to hold on really tight, do nothing and hope their problems go away while awarding their friends massive no bid government contracts to do nothing.

Im not just bring pejorative, come and take a look. The first thing PM did after the vote was resign. Theresa May took over and couldn't make it work. Now we have BoJo the Clown and he won because the oppositions best candidate was all but a communist who wanted to shut down most of the banks and all go back working in factories. BoJo's never had any strategy beyond opportunistism. That won't really work in this circumstance. Except that the sale could probably be approved if ARM spent £100m on "consulting" from a tory donor?

'a communist who wanted to shut down most of the banks and all go back working in factories'

That sounds like its straight from the Daily Mail, quite unfair summary.

In terms of economic damage, BoJo is certainly giving him a run for his money

Back to the topic at hand: British state appear very reluctant to interfere with 'free market', significantly more so that the US government. I don't feel donation would be neccessary

Don't get me wrong, Bojo is a turd and Corbyn at least had his heart in the right place (though that was was about 1952).

He did clearly and repeatedly say he wanted to massively reduce financial services (where I work) and get people like me into factories to make stuff (I like a cushie office thanks, I don't want to work on a production line) though.

I'd go further than you: the state won't interfere in the free market UNLESS they have a private interests (wealthy donors, personal fortunes etc) to protect. Its survival of the fittest for most of us.

I'm jot quite sure what you mean by your last sentence? Donation? Sorry if I'm being thick.

Good, as it should. No company that competes with ARM customers should ever own ARM.

It's like selling it to Apple. I hope this will be stopped.

You got to love Masa Son but he is really pulling strange moves lately... ARM is doing really cool stuff merging them with NVIDIA is a terrible idea.

Good I hope the whole sale fails

Imagine working hard your whole life that you get to a point that most cannot even dream of getting to and having some schmuck on an online forum who knows nothing other than some headline hoping that you would fail.

It appears the trend is becoming that just by being negative and short on everything is some kind of lazy hack to appear intelligent.

Are you annoyed that he's being negative, or because he didn't back it up with a reason?

Because I've done development both for embedded arm microcontrollers and CUDA. ARM feels like a benevolent overlord that wants to help you. Documentation is open, compilers are easily accessible, there's lots of random blogs with best practices on how to do common operations. Nvidia feels like their entire goal is to extract as much money out of you as they can.

I'm not hoping ARM fails. I'm hoping the sale fails, because if the sale succeeds, ARM will fail.

Can't speak for the other poster but original post (Literally just "Good I hope the whole sale fails") provides no reasoning, information, discussion, or anything else of value, exactly the sort of low effort comment that the HN culture and dang usually discourages.

Yeah I should have added my reasons. My main reason is Nvidia’s stewardship of ARM, I think, would harm the whole ecosystem just look at Nvidia’s attitude towards open source drivers for Linux and the BSDs. Sure it’s basically a slippery slope argument but I think others have voiced similar concerns.

Imagine building a business on the goodwill and trust of your customers and then selling it off to the highest bidder while leaving them hanging in the wind. That's the typical acquisition story.

Who is the hard worker in this statement? A corporation is literally a set of legal documents. No human was discussed at all.

He's just expressing his opinion and it one likely shared by many other people.

Lol. Do you work for SoftBank? Or Nvidia? They could have gone public and all employees with any skin in the game (aka options) would make a killing. Nvidia ownership of ARM would only harm the industry.

Recall how Intel was dictatorial in levering the 286 architecture into all the LSI chips that board makers needed. How Intel extorted the market price wise until regulators forced a way for AMD to compete and how the decline and fall of Intel thus came to pass? Now think what could happen of Nvidia owned ARM, Apple would soon feel the screws. as would all the ARM using group as Nvidia would flay them to the bone to get that $40 billion it went into debt to get back so it can throw the money lenders off their back. Rates will rise, and the screws Nvidia would feel would go through them and into all their clients. Since it is a software-like business, it would not be easy for others to repeat what they did to compete.

> Now think what could happen of Nvidia owned ARM, Apple would soon feel the screws. as would all the ARM using group as Nvidia would flay them to the bone to get that $40 billion it went into debt to get back so it can throw the money lenders off their back.

Why would Nvidia be able to sell to Apple at a higher price than the price ARM is currently selling at to Apple?

If Nvidia instructs ARM to do so, as 100% owner...

Why would ARM (Softbank) not already be asking for as much money as Apple is willing and able to play?

apple has a forever license on ARM, nvidia can't do anything about that

Is the fee also fixed?

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