ARM created a business model for itself where they had to act as a "BDFL" for the ARM architecture and IP. They made an architecture, CPU designs, and GPU designs for others. They had no stake in the chip making game, and they had others - Samsung, Apple, Nvidia, Qualcomm, Huawei, Mediatek, Rockchip and loads of others make the chip. Their business model was to make the ARM ecosystem accessible for as many companies as possible, so they could sell as many licenses as possible. In that way, ARM's business model enabled a very diverse and thriving ARM market. I think this is the sole reason we see ARM eating the chip world today.
This business model would continue to work perfectly fine as a privately held company, or being owned by a faceless investor company that wants you to make as much money as possible. But it's not fine if you are owned by a company that wants to use you to control their own position in the chip market. There is no way Nvidia (any other chip company, but as laid out previously Nvidia might even be more concerning) will spend 40 billion on this without them deliberately or inadvertently destroying ARM's open CPU and GPU ecosystem. Will Nvidia allow selling ARM licenses to competitors of Nvidia's business? Will Nvidia reserve ARM's best IP as a selling point for its own chips? Will Nvidia allow Mali to continue existing? Any innovations ARM made previously it sold to anyone mostly indiscriminatorily (outside of legal restrictions), but now every time the question must be asked "does Nvidia have a better propietary purpose for this?". For any ARM chip maker the situation will be that Nvidia is both your ruthless competitor, but it also sells you the IP you need to build your chips.
EDIT: ARM's interests up to last week were to create and empower as many competitors for Nvidia as possible. They were good at that and was the root of the success of the ARM ecosystem. That incentive is completely gone now.
Unless Nvidia leaves ARM alone (and why would they spend $40B on that??), this has got to be the beginning of the end of ARM's golden age.
- It will know of their product plans (as they will need to buy licenses for new products).
- It will know their sales volumes by product (as they will need to pay fees for each Arm CPU sold).
- If they need technical help from Arm in designing a new SoC then the details of that engagement will be available to Nvidia.
How does this not give Nvidia an completely unfair advantage?
But I do think it's important that we recognize that we're going from a position of tremendous competitiveness to a much less competitive situation. And that will be a situation where ARM will be tightly controlled and much less inducive to the innovation we've seen in the last years.
Hi! Counterexample here.
Especially because of the x86 oligopoly I would think that Arm is so much more important as an ecosystem.
IIRC you watch the "Rise of the Centaur" documentary they talk about the Intel lawsuit, and the corresponding counter suit that they won. Which makes the whole thing sound like MAD.
More interesting there is https://en.wikichip.org/wiki/zhaoxin/kaixian
In some ways, it actually frees them up a bit; as they don't have to reciprocate any efforts with Intel. Which they tried to leverage with their Padlock technology. Unfortunately, their marketshare limits any real practical usage of those benefits.
Uuuuh, presumably the case was about patents, right? I don't see how cleanroom-ing is fine with regard to patents.
Summary: Cyrix (and subsequently, VIA) have an implied license to Intel's patents; allowing them to develop x86 hardware.
How that differs from AMD: AMD and Intel have a full cross-license on technologies. This means, AMD can utilize Intel resources to integrate AVX-512, a ring-bus, etc (and vice versa).
VIA can not. They must develop those technologies independently, in a compatible manner.
Oddly enough, integrated circuits have their own IP scheme. IP has copyright, patent right, trade secrets, trademarks, and mask works. You rarely learn about mask works, since they're so narrow.
I think a lot of this would hinge on that corner of the law.
The problem with waiting for the patents to expire is you're always stuck 20 years behind.
Being 20 years behind isn't a particularly big deal if those 20 years are basically just SSE3, SSE4, AVX.
But, given the high market share of Arm in several markets allowing one firm the ability to use that market share to gain competitive advantage in related markets seems to me to be deeply problematic.
- They don't license because they can make a lot more money manufacturing the chips themselves.
- AMD also has the right to x86 because Intel originally allowed them to build x86 compatible chips (some customers insisted on a 'second source' for cpus) and following legal action and settlements between the two companies over the years there is now a comprehensive cross licensing agreement in place. 
- Note that AMD actually designed the 64 bit version x86 that is used in most laptops / desktops and servers these days.
IBM required it. It was their business MO to protect themselves from losing access to a technology or having the market be dictated by one company. Intel acquiesced so that they would be the architecture of the IBM PC-series.
Intel did change sockets as a means to disallow socket-compatibility; forcing consumers into their architecture if they bought their motherboard, but that had no effect on AMD's development. AMD had purchased a significant share of DEC's engineering portfolio and, along with it, their employees. Those employees then developed the K7 (Athlon) architecture around some of the Alpha's technological advantages, which included HyperTransport, a multi-issue FPU (fixing one of the major issues AMD had struggled with and bringing them ahead of Intel), etc.
Not that they would complain if AMD lost their license or ceased existing, they just don't seem to actively be trying to cancel the license at this point.
Only in countries with poor regulators like the states does it work like this.
It works like that in Japan: say hello to the many giant conglomerates that rule their economy top to bottom.
It works like that in South Korea: say hello to Samsung, roughly 12% of South Korea's GDP in a given year (Walmart by contrast is equal to 2.5% of US GDP, and that's crazy big).
It works like that in Germany: say hello to a parade of big old industrial giants that have dominated their economy for most of the past century and will continue to.
It works like that in China, openly so: they intentionally go out of their way to promote giant national champions at the expense of everyone else.
It works like that in France: their largest corporations and richest individuals are even larger in relation to their economy and national wealth than they are in the US (say hello to Arnault, Bettencourt, Pinault and the Wertheimers).
It works like that in Russia: say hello to the countless, directly state protected oligarchs. Threaten their interests, you die. Their approach is super simple.
It works like that in Italy and Spain, which are both dominated by old, large corporations and family interests. Which heavily explains their forever economic stagnation.
It even works like that in Switzerland: ever see how large their financial companies are in relation to the economy? Who do you think actually runs Switzerland? Their banks are comically outsized versus the size of the economy.
It completely works like that in Brazil and India.
It works like that across all of the Middle East, to a much greater degree than most anywhere else.
It works like that in second tier economies, including: Poland, Mexico, Argentina, Romania, Turkey, Thailand.
It works like that in poor countries, including: Vietnam, Indonesia, Philippines, Ukraine, South Africa, Pakistan, Bangladesh.
Might and reality is not right.
We need competition. We adore competition. And even the countries you quote many do have competition. You just do not innovate and of course one can try to stop and rest. But the works does not.
Be water not mountain my friend.
How exactly is this only like in the states?
In reality Arm commoditised in many markets CPUs by making reasonable designs available to all at reasonable cost, keeping control over the ISA and allowing firms to innovate in their implementations. You can have the same code running on a Raspberry PI, an iPhone and a 64 core Graviton2 server.
The Nvidia takeover threatens all this by giving control to a firm who could well 'unlevel' the playing field and even refuse to offer the latest IP to competitors.
RISC-V may provide a way out for firms unhappy with Nvidia but it could be a bumpy path. And its certainly not the case that Nvidia are paying $40bn to consolidate Mali with their own graphics IP.
NO! That is how the world does NOT work!
We seen it trillion times, I am disappointed the least seeing this negligent 'argument' for blocking dominance! Shame!
Samsung comes to mind as another company that makes their own TVs, phones, SSDs, ect., but is also perfectly happy to license the underlying screens and chips in those products to other companies. From my vantage point, the setup seems to be working well?
EDIT: Let's be clear that ARM's incentive last week was to create and empower as many competitors for Nvidia as possible. They were good at that and was the root of the success of the ARM ecosystem. That incentive is completely gone now.
I'm guessing Samsung has a track record where I'd feel a little more confidence in the situation if they'd taken over ARM here, but in general ARM's sale to Softbank and thereby its exposure to lesser competitive interests has been terrible. They could have remained a private company.
Well, the optimistic reason would be talent-share. nVidia has a lot of chip designers, and ARM has a lot of chip designers, and having all of them under one organization where they can share discoveries, research and ideas could benefit all of nVidia's products.
Buying ARM not only allows them to control the direction of development, it also protects them should anyone else have bought it with hostile intent.
Personally I see this as more of an attack on Intel.
I likewise don't think destroying the ARM ecosystem is Nvidia's primary objective here - far from it. It might not even be a secondary objective. But I do think the ARM ecosystem will be slowly torn apart either as an innocent bystander or as a less prominent secondary objective (given real-world complexities, probably some combination of both). When Nvidia buys ARM, and they explicitly buy them to improve their competitive position, there's only one direction where I see the incentives going. Those will be against the open ARM ecosystem, which is a breeding ground for big and small competition against Nvidia.
Even if Nvidia's primary motives are relatively benign, I think they'll inevitably create a sitation where the ARM ecosystem can't continue existing in its current form. That's where the real tragedy will be.
The problem is more with smaller companies that could be destroyed before they even get a chance to compete. Those can be bullied pretty easily by a company the size of Samsung.
Not the one to rule them all is the key to every innovation.
It must be probably weird for Apple technical staff to communicate so closely with one division of Samsung while fighting for market share with another division of the same company.
What markup does Apple pay for Samsung OLED displays compared to Samsung’s other OLED customers? I think this is highly relevant if you want to use it as an example. Because if the markup for Apple is 5x that of other buyers of Samsung OLED displays then you certainly can’t say Samsung is “happy” to sell them to Apple.
Same for nVidia-owned-ARM: if they’re happy to sell ARM licenses at 5x the previous price, then that will surely increase sales for nVidia’s own chips. I guess my overall point is: a sufficiently high asking price is equivalent to a refusal to sell.
obviously nobody but Samsung and their customers will know that information, and anyone who could reveal it is under NDA.
Apparently the prices are good enough that Apple doesn't go elsewhere.
A bidding war of course.
On the surface, it's capitalism at work. In reality, Samsung winds up in a no-lose situation. If Motorola wins, Samsung gets bigger margins due to the battle. If Samsung wins, they play "pass around the money" with their accountants, but their only actual costs are those of production.
I'd note that chaebol wouldn't exist in a free market. They rely on corruption of the Korean government.
There's a whole lot of inertia for Nvidia to take advantage of here while the rest of the industry figures out where it's going.
I doubt Nvidia would substantially disrupt or cancel licensing to the many third-rate chip designers you listed. But, if they can leverage this acquisition to build Windows/Linux CPUs that can actually compete with AMD and Intel, that would be a win for consumers. And Nvidia has shown interest in this in the past.
Yes, its a massive disruption to the status quo. But it may be a good one for consumers.
This is nothing to do with extending Nvidia's ability to use Arm IP in its own products.
Yes, ARM mostly just does licensing, but it may turn out that this acquisition gives Nvidia positive influence over future ISA and fundamental design changes which emerge from their own experience building microprocessors.
Maybe that just benefits Nvidia, or maybe all of their licenses; I don't know. But, I think the high price of this acquisition should signal that Nvidia wants ARM for more than just collecting royalties (or, jesus, the people here who think they're going to cancel the licenses or something, that's a wild prediction).
The other important point is Mali, which has a very obvious and natural synergy with Nvidia's wheelhouse. Another example of Nvidia making ARM better; Nvidia is the leader in graphics, this is no argument, so their ability to positively influence Mali (whether by actually improving it, or replacing it with something GeForce) may be beneficial to the OEMs who use it.
In my view you have this completely backwards. I think the opposite is true and that Nvidia is not a powerhouse CPU designer at all. They make extremely impressive GPUs certainly, but that does not automatically translate to great capabilities in CPUs. In terms of CPUs they have so far either used standard ARM designs and have attempted their own Project Denver custom architecture which are not bad but have not impressed CPU wise either. In this area Nvidia would need ARM - primarily for themselves.
> The other important point is Mali, which has a very obvious and natural synergy with Nvidia's wheelhouse. Another example of Nvidia making ARM better; Nvidia is the leader in graphics, this is no argument, so their ability to positively influence Mali (whether by actually improving it, or replacing it with something GeForce) may be beneficial to the OEMs who use it.
I know you're only entertaining the thought, but the image of Nvidia shipping HDL designs of Geforce IP to Samsung or Mediatek in the short term future seems completely alien to me. Things would need to change drastically at Nvidia for them to ever do this.
Certainly Nvidia has the capabilities to sell way better graphics to the ARM ecosystem, and very likely only one line of GPUs can survive, but it just seems extremely unlike Nvidia to ever license Geforce IP to their competitors.
I don't believe they ever closed a deal, but clearly Nvidia had some interest in becoming an IP vendor. Perhaps the terms were too onerous or the price too high.
Since Ampere and GPUs in general are structured nothing like a microprocessor, I doubt you'll find anyone who agrees with that.
On the Intel side, the process obstacles have been tragic, but they have plenty of hot products and plenty of x86 market share to lose, or in other words, plenty of time to recover CPU performance dominance.
Apple has pulled this off about 4 times because of their small market share and willingness to deprecate old hardware, software and the close control of the hardware they release.|
In the PC world - x86 will remain with us for a LONG time to come.
But why would a company spend that much money to buy a company and destroy it afterwards?
Personally I don't think that's true in this particular case, but the strategy isn't exactly unheard of.
Why is that bad? Not only it's common business practice (the more you buy from us, the cheaper we sell), it also makes sense from the support perspective. Support the integration between their cores and a different GPU would be more work for them than integration of their cores with their own GPUs.
That's why companies expand to adjacent markets: efficiency.
A completely different thing would be to say: "if you want our latest AXX core, you have to buy our latest Mali GPU". That's bundling, and that's illegal.
Microsoft have away a free browser with their operating system - leaving little room for other browser vendors to serve that market.
Each ARM design deal including a GPU for cheap leaves little room for other GPU vendors.
There are three possibilities here: ARM's design is approximately the same as the competitory, ARM's design is inferior to the competitor, and ARM's design is superior to the competitor.
If faced with two equivalent products, staying with the same supplier for both is best (especially in this case where the IP isn't supply-limited). The discount means a reduction in costs to make the device. Instead of ARM making a larger profit, their customers keep more of their money. In turn, the super-competitive smartphone market means those savings will directly go to customers.
In cases where ARM's design is superior, why would they bundle? If they did, getting a superior product at an even lower price once again just means less money going to the big corporation and more money that stays in the consumer's pocket.
The final case is where ARM has an inferior design. I want to sell the most performance/features for the price so I can sell more phones. I have 2 choices: slight discount on the CPU but bundled with an inferior GPU or full price for the CPU and full price for a superior GPU. The first option lowers phone price. The second option offers better features and performance. For the high-end market, I'm definitely not going with the discount because peak performance reigns supreme. In the lesser markets, its a calculation of price for total performance and the risk that consumers might prefer an extra few FPS for the cost of another few dollars.
Finally, there are a couple small players like Vivante or Imagination Technologies, but the remaining competitors in the space (Intel, AMD, Nvidia, Qualcomm, Samsung, etc) aren't going to be driven under by bundle deals, so bundling seems to be pretty much all upside for consumers who stand to save money as a result.
It is actually the other way around. ARM is more like giving the Mali GPU for free ( or at a very low cost ) if you use their CPU.
>Also this caused obvious problems for IMGtec
Yes, part of the reason why PowerVR couldn't get more traction and Apple were unhappy with their GPU pricing.
What would be an issue would be if Arm used their market power in CPUs to try to control the GPU market - e.g. you can't have the latest CPU unless you buy a Mali GPU with it.
Just look at ARMs annual net, multiply by 10, multiply that by 2 assuming starry-eyed optimism about you being better at generating value from ARM IP, you’re still far from 40 billion.
Like AMD? Sure. None of the ARM IP compete with Nvidia much. Not to mention by "Not" Selling to AMD it create more problem for its $40B asset than anyone could imagine.
>Will Nvidia reserve ARM's best IP as a selling point for its own chips? Will Nvidia allow Mali to continue existing?
Sure. Mali dont compete with Nvidia at all. Unless Nvidia will put up their CUDA Core for IP licensing with similar price and terms to Mali. Could they kill it or raise the price of Mali? Sure. But there is always PowerVR. Not to mention AMD is also licensing out Radeon IP to Mobile. Mostly because AMD dont / cant compete in that segment.
>Unless Nvidia leaves ARM alone (and why would they spend $40B on that??)
It has more to do with Softbank being an Investor. They were already heavily invested in Nvidia. And they need money, they want out. And seriously no one sane would buy ARM for $40B ( It is actually $35B, with $5B as performance bonus, the number $40 was likely used only for headline. ) As a matter of fact I would not be surprised if Softbank promise to buy it back someday. This also paint a picture of how desperate Son / Softbank needs those Cash. So something is very wrong. ( Cough WeWork Cough )
But I do understand your point. Conflict of Interest. Similar to Apple wouldn't want to build their Chip in Samsung Foundry.
While I would have liked ARM to remain independent. I am not as pessimistic as some have commented. And normally I am the one who had people pointing at my pessimism.
On the optimistic side of things. There are quite a lot of cost could be shared with the tools used for TSMC and Samsung Foundry implementation. ( Nvidia is now in bed with Samsung Foundry ) For ARM that means higher margin, for its customers that mean access to Samsung Foundry Capacity where previously they are stuck with TSMC. Nvidia also gets to leverage ARM's expertise in licensing, so their Nvidia GPU could theoretically enter new market. The real IP with Nvidia isn't so much about the GPU design, but its Drivers and CUDA. So may be Nvidia could work towards being an Apple like "Software" company that works with specific Hardware. ( Pure Speculation only )
There are lots of talk about Nvidia and ARM. While I dont think the marriage make perfect sense, It is not all bad. There are more interesting point no one is talking about. Marvell, AMD, Xillix and may be Broadcom. The industry is consolidating rapidly because designing leading edge chip, even with the cheap IP licensing is now becoming very expensive. And the four mentioned above have less leverage than their competitors.