
Hermann Hauser: ‘It’s in Nvidia’s Interests to Destroy Arm’ - ml985
https://tech.newstatesman.com/business/hermann-hauser-nvidia-destroy-arm
======
rvz
The UK is actually the one that has ignored and destroyed ARM (and Imagination
Technologies) and it has been compared to 'selling off the crown jewels' [0]
to SoftBank which was welcomed by a UK government cabinet minister in 2016 as
a 'big vote of confidence in British business.' [1]

Actually, SoftBank got ARM at a special Brexit discount. For them, they saw it
as the best deal of 2016 and for the UK, you might as well say they got
scammed.

So fast forward to 2020, SoftBank didn't get that 10x return they wanted from
ARM and is now selling to get a tiny profit, where it is apparently heading
for Santa Clara.

The rest of the UK didn't care and didn't know what they had, until it was too
late and the same fate was repeated for Imagination Technologies. What a
shame.

[0] [https://qz.com/734882/the-32-billion-japanese-takeover-
of-a-...](https://qz.com/734882/the-32-billion-japanese-takeover-of-a-british-
tech-giant-is-not-a-big-vote-of-confidence-in-post-brexit-britain/)

[1] [http://blog.policy.manchester.ac.uk/posts/2016/08/arm-
holdin...](http://blog.policy.manchester.ac.uk/posts/2016/08/arm-holdings-
takeover-deal-are-we-selling-the-crown-jewels/)

~~~
ethbr0
Would be curious on any Brits' opinions on if this (failure to support
revolutionary technology) happens more there, and if so then why.

Recognize biases of hindsight, but it seems like private equity markets in
Britain aren't interested in technology at the requisite scale.

There's an incredible historical tradition [1], but the majority tend to be
either developed with the help of a (1) few angel investors (and the luck and
smaller scale that entails) or (2) government contracts (and the politics that
entails).

[1]
[https://en.m.wikipedia.org/wiki/List_of_British_innovations_...](https://en.m.wikipedia.org/wiki/List_of_British_innovations_and_discoveries)

~~~
Gravityloss
I think Paul Graham went to the UK once to try to find technology investors.
Once. (Can't find that essay right now.)

~~~
ethbr0
Speaking to something I have little experience with, but 'old, @&$@-you money
isn't adventurous' would seem to apply.

~~~
ativzzz
Makes sense. If I had old f you money, I'd be more concerned about preserving
it for multiple generations than growing it significantly.

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onion2k
While the article talks about the possibility of the UK government blocking a
sale to Nvidia, the situation with Brexit and the need to get trade deals with
the US means it's _really_ likely the government here would allow the sale to
go ahead should the US government make it a condition of a deal. Brexit has
_screwed_ the UK.

~~~
ArgyleSound
A US trade deal is a symbolic and political victory but makes virtually no
difference economically. I don’t think the UK government will calculate that
prospect of one would outweigh losing ARM.

~~~
matthewmacleod
I don't have the same level of confidence you do – the current UK government's
strategy is very much "symbolic and political" over absolutely all other
concerns.

Faced with the political impact of "that amazing US trade deal we promised you
is off the table" versus "a company you probably haven't actually heard of,
which was already Japanese-owned, is becoming US-owned"… well, I don't have
much confidence.

~~~
moonbug
you misspelt shambolic.

------
yoran
> Hauser says the acquisition would allow Nvidia to swipe “the microprocessor
> crown from Intel”, and become the chip supplier for 95 per cent of mobile
> phones, 90 per cent of embedded controllers for the internet of things, as
> well as taking the PC and data centre markets.

Is it a possibility that an acquisition by Nvidia will be blocked due to anti-
trust reasons? Who is the authority who has to decide on that? Is it the UK
cause ARM is a UK company? Or Japan because SoftBank is the largest
shareholder?

~~~
Someone
Each country/country group that the to-be-merged company will have presence in
can block the merger within its borders (assuming it has anti-trust laws,
which most, if not all, will have)

Of course, the larger such a country (group), the more the to-be-merged
companies will think pursuing the merger isn’t worth it.

------
imtringued
It's this short sighted argument. If Nvidia "destroys" Arm then they just end
up flushing a billion dollars down the drain. ARM's is important because it's
what everyone uses. Once Nvidia destroys it nobody will use it and therefore
Nvidia will gain no leverage. If anything, once Nvidia buys ARM it will have
to keep it alive.

~~~
ethbr0
The best play would be to take the Intel approach: run ARM independently, and
just build best-in-class integration with Nvidia GPUs / features.

Substantial anti-trust concerns are avoided, while building exactly the moat
you want: no competitor can afford to compete with the level of integration
investment.

~~~
someperson
Why can't NVidia achieve this without spending tens of billions buying ARM?

~~~
ethbr0
You have a lot of options available when you own a company, that you don't
have when they're independent.

Example: Nvidia would prefer certain specifications on an internal bus they'd
use, but nobody else uses as a standard.

~~~
justaguy88
They can already do that

~~~
ethbr0
Not exclusively. ARM's roadmap is driven by what all of their customers want,
not just Nvidia.

There doesn't appear to be sufficient profit margin in the industry for too
many greenfield, non-reference custom implementations.

So if Nvidia-ARM sticks out a reference implementation or architecture choice
that's beneficial to Nvidia, there's limited capability for others (Apple,
Cavium/Marvell, Qualcomm, & Samsung?) to strike their own path, and they'll
certainly be paying steeply to do so.

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MaxBarraclough
> would not only strike a blow to the UK’s technological sovereignty

ARM is currently owned by a Japanese conglomerate.

[https://en.wikipedia.org/wiki/Arm_Holdings](https://en.wikipedia.org/wiki/Arm_Holdings)

~~~
coldtea
I'm pretty sure Hermann Hauser is aware of this, since he co-found and later
sold ARM.

He doesn't consider the Japanese conglomerate owing ARM a blow to the UK's
technological sovereignty, but he does for Nvidia.

~~~
Ygg2
Didn't he complain about Japanese conglomerate owning ARM as well?

~~~
achamayou
He did:
[https://www.bbc.co.uk/news/business-36827769](https://www.bbc.co.uk/news/business-36827769)

------
valuearb
Hauser is worried NVidia will pay $40B so it can light ARM on fire. That’s
crazy on it’s face.

Follow-up by noting ARMs actual economic value is less than $10B, do it seems
unlikely NVidia or anyone else would pay what SoftBank is asking.

Lastly Hauser says NVidia would do this to become the “dominant microprocessor
company” in the world, then cut its customers off from new developments.

First, ARM isn’t a dominant microprocessor company, it’s architecture is
dominant but it’s revenues make it a flea among elephants. It doesn’t make
anything like Intel, AMD, or TSMC, it simply licensed designs. And it’s own
designs for that architecture, while popular, aren’t near the best, Apples
are.

Apple and others have perpetual licenses allowing them to make their designs
and enhancements. No one is getting “cut off” from ARMs mediocre next gen
designs, they may never use them to begin with.

~~~
DudeInBasement
ARM might be sold from SoftBank to get money. They aren't doing so well after
the 'WeWork' garbage.

~~~
valuearb
I understand they need money, but expect it will have to be a fire-sale.
Unless my understanding of ARM financials is far off base, no financial buyer
would pay even $10B, and it’s hard to imagine strategic buyers paying over 3x
that.

------
stefan_
Hauser seems like a fanatical UK nationalist nutjob who has lost sight of the
simple reality that ARMs growth chances are looking very bleak. Everyone who
wants one already has a perpetual license, all their licensees are better at
improving the processors and extracting value than ARM has been.

------
SXX
People who say that Nvidia "gonna destroy ARM" know nothing about Nvidia. All
their history Nvidia live on lock-in integrations and for profiting from that
they need ARM alive and thriving. A lot of open source folks might hate it,
but Nvidia is R&D heavy company. Every year they come up with many new
proprietary technologies that help them to keep perceived leadership and also
keeps everyone locked-in into their tech.

All these technologies are intentionally built to make them hard to copy for
competitors and easy to protect with patent encumbrance, but on the bright
side technologies that actually prove to be useful slowly turn into open
industry standards. So basically Nvidia invest a lot in niche features and
then recoup the costs using their top-notch marketing.

IMHO what people missing about ARM is that on mobile market there are already
companies with worse lock-in who don't tend to share their hardware
innovations with others at all, e.g Apple. And high-end ARM SOCs market would
only benefit if someone finally gonna compete with Apple on more than just
marketing.

~~~
shmerl
Company which is heavily pushing lock-in shouldn't be allowed to buy ARM,
since it can cause too much damage by it.

Lock-in is not a driver of innovation, it's a brake on it.

~~~
SXX
I talked with you on several different platforms over years and I'm also a bit
of open source zealot. But the deal is: reason why Nvidia able to keep their
lock-in going for decades is because they actually do invest a lot into R&D
and take risks.

There simply very few companies that doing it. Big reason why Intel and AMD
have their open source teams is because that's give them edge against Nvidia.
All we see from Nvidia competitors is just reimplementation of the same tech
Nvidia already had, but once AMD have some good tech they keep it proprietary
too.

ARM space is already locked-in and fully-proprietary company (Apple) have
leadership. I don't see how Nvidia getting into competition can make it any
worse.

~~~
shmerl
ARM chips are used even by someone like AMD.

Point is, Nvidia can't be trusted not to use that anti-competitively, given
their existing reputation and amount of leverage they would get on even more
things. So if competition laws would have worked as intended, Nvidia wouldn't
have been allowed to buy ARM.

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gwd
I used to own ARM stock before the Softbank aquisition -- I'd love to be able
to buy some again.

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dwighttk
Seems to promote IPO as an alternative to being bought, but doesn’t seem happy
with Softbank or (potentially) Nvidia.

~~~
fnord123
ARM was previously listed, so would this be an Initial Public Offering?

~~~
protomyth
Yep, because they don't currently have stock on any market.

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justaguy88
Time to buy RISC-V stock

~~~
dathinab
What RISC-V stock, there is not a "RISC-V company". Which is one of the main
points where it makes a difference.

Through you could decide go for SiFive, Inc through I have no idea if they
entered or will enter the stock marked.

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throwaway4good
"However, Hauser fears that CFIUS regulation could be applied more broadly
than this. “If the president decides Britain doesn’t deserve to have any more
microprocessors, then he can decide that Britain isn’t allowed to use its own
microprocessors,” he says, adding that “these decisions should be made in
Downing Street, not in the White House”. "

Don't worry mr. Hauser. The target of the US cornering of the chip market is
of course China ...

~~~
guiriduro
Which is why I would have thought SoftBank selling ARM to Huawei would be an
absolutely perfect strategic move.

~~~
dathinab
It also would be somewhat crazy, tbh.

