Nvidia’s ARM acquisition is stalled

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"Kress pointed out that the deal has to close by September 2022, giving Nvidia roughly a year. Otherwise, ARM’s current owner, Softbank Group Inc. gets to keep a $1.25 billion breakup fee that Nvidia already made as a down payment."

naw, Jenson will just send a box of black leather jackets to Softbank ... I'm sure that would still the waters

https://www.msn.com/en-us/money/com...dollars-at-stake/ar-AANtIO1?ocid=winp1taskbar
 
Moving that $1.25B deadline is pretty easy, those are put in for cases where the buyer walks away essentially wasting the sellers time. They are super common in all sorts of large purchases, in this case it’s government regulators slowing the process, SoftBank would move that date just to not tank a bad faith negotiation lawsuit, that one they would likely loose and 2 would prevent them from selling arm during the lawsuit which could take a long long time.

SoftBank wrote down another set of losses on ARM last quarter and they want to sell it.

In regards to somebody else purchasing ARM, it’s basically NVidia, or another financial group or a patent troll firm. But NVidia won’t make any major changes to licensing they may raise the costs and restructure management and sell off some buildings but they won’t make any drastic changes. What they will be able to do is push their graphics hardware and API’s into the design channels, so anybody using a basic licensed chip design is running an NVidia GPU. This gets them a huge market share especially in mobile, it would be something like 85% of the mobile space and 60% of all Chromebooks sold. That’s billions of devices and would give them huge leverage in that space with developers.
 
Moving that $1.25B deadline is pretty easy, those are put in for cases where the buyer walks away essentially wasting the sellers time. They are super common in all sorts of large purchases, in this case it’s government regulators slowing the process, SoftBank would move that date just to not tank a bad faith negotiation lawsuit, that one they would likely loose and 2 would prevent them from selling arm during the lawsuit which could take a long long time.

SoftBank wrote down another set of losses on ARM last quarter and they want to sell it.

In regards to somebody else purchasing ARM, it’s basically NVidia, or another financial group or a patent troll firm. But NVidia won’t make any major changes to licensing they may raise the costs and restructure management and sell off some buildings but they won’t make any drastic changes. What they will be able to do is push their graphics hardware and API’s into the design channels, so anybody using a basic licensed chip design is running an NVidia GPU. This gets them a huge market share especially in mobile, it would be something like 85% of the mobile space and 60% of all Chromebooks sold. That’s billions of devices and would give them huge leverage in that space with developers.
How does Softbank loose money on ARM? No manufacturing facilities, little equipment and facilities to maintain. This makes zero sense at least to me being a licensing business model. R&D costing more than your fees received and an additional 1.25B?
 
How does Softbank loose money on ARM? No manufacturing facilities, little equipment and facilities to maintain. This makes zero sense at least to me being a licensing business model. R&D costing more than your fees received and an additional 1.25B?

ARM has over 6000 employees and many offices and design facilities around the world.

https://www.arm.com/company/offices
 
Moving that $1.25B deadline is pretty easy, those are put in for cases where the buyer walks away essentially wasting the sellers time. They are super common in all sorts of large purchases, in this case it’s government regulators slowing the process, SoftBank would move that date just to not tank a bad faith negotiation lawsuit, that one they would likely loose and 2 would prevent them from selling arm during the lawsuit which could take a long long time.

SoftBank wrote down another set of losses on ARM last quarter and they want to sell it.

In regards to somebody else purchasing ARM, it’s basically NVidia, or another financial group or a patent troll firm. But NVidia won’t make any major changes to licensing they may raise the costs and restructure management and sell off some buildings but they won’t make any drastic changes. What they will be able to do is push their graphics hardware and API’s into the design channels, so anybody using a basic licensed chip design is running an NVidia GPU. This gets them a huge market share especially in mobile, it would be something like 85% of the mobile space and 60% of all Chromebooks sold. That’s billions of devices and would give them huge leverage in that space with developers.

Also you can then buy a Nvidia server with a complete custom solution Nvidia CPU (not just like they can make with their ARM license now), Nvidia GPU, Nvidia DPU...
 
Good.

But the only way I will be truly happy is if this deal crashes and burns.

Nvidia cannot be allowed to own ARM under any circumstance.

Here's a scary thought: Nvidia might be one of the better companies to own ARM. Nvidia is shit in all kinds of ways, but I'd rather have Jensen and his jackets at the helm than some hedge fund. Nvidia will be compelled to stick within some pretty strict limits controlling what they're allowed to do and not to do. The same wont apply to hedge funds or patent troll companies.
 
How does Softbank loose money on ARM? No manufacturing facilities, little equipment and facilities to maintain. This makes zero sense at least to me being a licensing business model. R&D costing more than your fees received and an additional 1.25B?
Well, they operate a number of campuses, some 6000+ employees, huge amounts of R&D to keep up, their license fees have remained stagnant since Softbank purchased them but costs to advance the platform have ballooned, Softbank has been mismanaging them since day one just like all their failed tech companies they purchased. The Japan Times put up an article on their number not too long ago as the Japanese government is not happy with them for how they have been handling themselves on a number of fronts, the Japan Times is paywalled but here's the important bit from the article.

"Formerly the U.K.’s largest tech company before SoftBank’s $32 billion takeover, much of ARM’s losses have stemmed from rapidly increasing head count, up 856 (17.6 percent) from the previous fiscal year-end, predominately from hiring new engineers. The once relatively conservative U.K. chip company ARM Holdings PLC has rapidly expanded in size and head count, and returned a sizable loss posted a loss of $200 million for the nine months to Dec. 31, off net sales of $1.4 billion, according to SoftBank’s consolidated results published Wednesday."

I should point out that the article also mentions that apparently before NVidia made their offer their plan was to sell it off via public IPO.
 
Also you can then buy a Nvidia server with a complete custom solution Nvidia CPU (not just like they can make with their ARM license now), Nvidia GPU, Nvidia DPU...
Yeah, they can make their own, but that is relatively costly and then it's a custom design, what they want is to ditch the Mali GPU architecture and replace it with their own. There are some good parts to Mali that I am sure they could scavenge, but getting their own designs in as a standard would be a huge win for NVidia. Look at what Samsung and AMD were able to accomplish with the new Exynos, now imagine that sort of advancement was part of the core and not something proprietary to Samsung but across the line, they would simultaneously increase the viability of the ARM platform for their clients while pushing AMD out of the market.
 
Well, they operate a number of campuses, some 6000+ employees, huge amounts of R&D to keep up, their license fees have remained stagnant since Softbank purchased them but costs to advance the platform have ballooned, Softbank has been mismanaging them since day one just like all their failed tech companies they purchased. The Japan Times put up an article on their number not too long ago as the Japanese government is not happy with them for how they have been handling themselves on a number of fronts, the Japan Times is paywalled but here's the important bit from the article.
Considering how old ARM is I wouldn't be surprised that ARM hasn't increased their fees much over the few decades. I wouldn't be surprised if that's by design. Considering how much Apple has profited from ARM you would think Apple would pay the most for licensing? Not like ARM is an unsuccessful product.

Good.

But the only way I will be truly happy is if this deal crashes and burns.

Nvidia cannot be allowed to own ARM under any circumstance.
Be careful for what you wish for, it may come true. There's always worse than Nvidia, like Apple.
 
Considering how old ARM is I wouldn't be surprised that ARM hasn't increased their fees much over the few decades. I wouldn't be surprised if that's by design. Considering how much Apple has profited from ARM you would think Apple would pay the most for licensing? Not like ARM is an unsuccessful product.
Apple doesn’t pay much at all for licensing, they own an architectural license which lets them develop their own silicon and it’s a flat fee something like $20M a year.
SoftBank has managed to destroy every tech company they have purchased through a series of administrative blunders and mis management.

One financial article explained how it was more profitable to operate the tech companies at a loss to offset their taxes to then sell off when they were no longer viable. But over the past couple of years they have failed to find buyers or held onto them too long and we’re left holding the bag, such as their WeWork debacle.
But ARM only made some 1.4 B in revenue over the entirety of 2020, Apple spends far more than that on R&D to keep themselves ahead of the competition. Samsung is in a similar boat, ARM’s actual designs are pretty non competitive and it’s the custom SOC’s that make up the bulk of the sales. And unlike the normal licensed cores ARM doesn’t get a cut of those.
 
Apple would be bad too, but I'm actually leaning towards "better than Nvidia".

Hard disagree.

Apple has no interest in sharing. Were they to buy ARM there's no way they'd license out any future improvements to the architecture. Any improvements would only be for Apple chips in Apple products. Large licensees with their own resources (Samsung, Qualcomm, NVidia, etc.) are able to make their own proprietary improvements on the ARM IP they've already licensed. The architecture fractures until each is largely incompatible with the others. Smaller players are stuck with whatever pre-acquisition agreements Apple is required to honor, and crossing their fingers that RISC-V becomes a viable option.

Not that I'm thrilled at the prospect of NVidia owning ARM. It's possible they could pull the same tricks, but I don't think they'd do anything that extreme. As a company they're much more in tune to the idea of licensing tech than Apple is. Worst case, I think, is that they make architecture improvements only for CPUs they sell, work with large customers on custom chips, and maybe don't license new IP for others to design into their own chips.

I would like to see SoftBank reconsider the IPO option. But that probably wouldn't net them nearly the same $$$.
 
Hard disagree.

Apple has no interest in sharing. Were they to buy ARM there's no way they'd license out any future improvements to the architecture. Any improvements would only be for Apple chips in Apple products. Large licensees with their own resources (Samsung, Qualcomm, NVidia, etc.) are able to make their own proprietary improvements on the ARM IP they've already licensed. The architecture fractures until each is largely incompatible with the others. Smaller players are stuck with whatever pre-acquisition agreements Apple is required to honor, and crossing their fingers that RISC-V becomes a viable option.

Not that I'm thrilled at the prospect of NVidia owning ARM. It's possible they could pull the same tricks, but I don't think they'd do anything that extreme. As a company they're much more in tune to the idea of licensing tech than Apple is. Worst case, I think, is that they make architecture improvements only for CPUs they sell, work with large customers on custom chips, and maybe don't license new IP for others to design into their own chips.

I would like to see SoftBank reconsider the IPO option. But that probably wouldn't net them nearly the same $$$.
The IPO option would see ARM owned by patent trolls, and it’s future determined via committee. It would be a slow death, NVidia at least already has a vested interest in the product line and a clear plan for it with the R&D resources to keep them in the fight. As it currently stands Apple, Samsung, and Amazon, have done more for ARM than ARM has in terms of product advancement.
 
The IPO option would see ARM owned by patent trolls, and it’s future determined via committee. It would be a slow death, NVidia at least already has a vested interest in the product line and a clear plan for it with the R&D resources to keep them in the fight. As it currently stands Apple, Samsung, and Amazon, have done more for ARM than ARM has in terms of product advancement.

There is no conceivable way that becoming a public company would allow patent trolls, who generally do not possess a lot of capital, to take any significant ownership of ARM (their main assets are the questionable patents used to extort payouts from those who can't afford to fight). Certainly not more than SoftBank (who would most certainly continue to own a significant number of shares) or any other large institutional investors, fund managers, etc. who would buy into an IPO (usually before it actually "goes public"). These large groups would control the board, not "Bubba's East Texas 'But On A Computer' Patent Holdings" and the like.

And there's certainly nothing preventing ARM from going after any possible patent violations now.
 
Hard disagree.

Apple has no interest in sharing. Were they to buy ARM there's no way they'd license out any future improvements to the architecture. Any improvements would only be for Apple chips in Apple products. Large licensees with their own resources (Samsung, Qualcomm, NVidia, etc.) are able to make their own proprietary improvements on the ARM IP they've already licensed. The architecture fractures until each is largely incompatible with the others. Smaller players are stuck with whatever pre-acquisition agreements Apple is required to honor, and crossing their fingers that RISC-V becomes a viable option.

Not that I'm thrilled at the prospect of NVidia owning ARM. It's possible they could pull the same tricks, but I don't think they'd do anything that extreme. As a company they're much more in tune to the idea of licensing tech than Apple is. Worst case, I think, is that they make architecture improvements only for CPUs they sell, work with large customers on custom chips, and maybe don't license new IP for others to design into their own chips.

I would like to see SoftBank reconsider the IPO option. But that probably wouldn't net them nearly the same $$$.

Nvidia has done nothing but make life as miserable as possible for consumers for 15 years. Lock-ins, lock-outs, market manipulations, you name it.

There are few companies I trust less than Nvidia. They believe in a type of "realpolitik" when it comes to doing business, using every unethical trick in the books to their advantage.
 
The best possible outcome would be for some some sort of industry consortium going in equal parts and buying them in a way that no one customer of arm technology can twist their ownership to their own advantage at the cost of their competitors.
 
I'd be inclined to believe post-acquisition Nvidia would transition and license out their Tegra designs, especially if they manage something competitive to Apple's M2. No reason to be an asshole when there's money to be made.

And I have a sneaking suspicion that despite what people think about Nvidia, they've been really well-managed overall. If that spill over to ARM, we'll be in for a treat.
 
No reason to be an asshole when there's money to be made.
And yet this is exactly what nVidia does every single damn day. GPP anyone?

nVidia's strategy is to screw over as many people as possible in order to chase the almighty buck and do it in every legal and illegal way they can get away with.
 
And yet this is exactly what nVidia does every single damn day. GPP anyone?

nVidia's strategy is to screw over as many people as possible in order to chase the almighty buck and do it in every legal and illegal way they can get away with.

There's no way you can compare the GPU market, with just a single competitor (AMD) to the mobile market, with the numerous partners that combined are much bigger than NVIDIA. Plus, they don't actually have comparable products. You're saying they'll screw over everybody that's using ARM designs and release their own mobile phone, tablet, mobile consoles, even cars?

In fact, with the "success" of the Switch, I believe they might be planning to push hard into the console market with ARM-based SoCs for the next next gen designs. Valve and Nintendo proved how popular mobile handheld consoles are, and it's basically an open field for now. Stick with their forte of making the SoC and the board layout, and push the rest of the responsibility to the product makers. Why tack on more risks than necessary?
 
And yet this is exactly what nVidia does every single damn day. GPP anyone?

nVidia's strategy is to screw over as many people as possible in order to chase the almighty buck and do it in every legal and illegal way they can get away with.

VERY different markets. They’ll also be compelled by legal agreements to continue licensing and not fuck around too much. They can get away with a lot of BS state-side, but a lot of tactics won’t fly in the EU or in Asian regions.
 
VERY different markets. They’ll also be compelled by legal agreements to continue licensing and not fuck around too much. They can get away with a lot of BS state-side, but a lot of tactics won’t fly in the EU or in Asian regions.
Also we the consumer are not the customer for ARM, Qualcomm, MediaTek, Samsung, Apple, they are the customers, we are just in need (or want) of their products.
 
There's no way you can compare the GPU market, with just a single competitor (AMD) to the mobile market, with the numerous partners that combined are much bigger than NVIDIA. Plus, they don't actually have comparable products. You're saying they'll screw over everybody that's using ARM designs and release their own mobile phone, tablet, mobile consoles, even cars?

In fact, with the "success" of the Switch, I believe they might be planning to push hard into the console market with ARM-based SoCs for the next next gen designs. Valve and Nintendo proved how popular mobile handheld consoles are, and it's basically an open field for now. Stick with their forte of making the SoC and the board layout, and push the rest of the responsibility to the product makers. Why tack on more risks than necessary?
It's not about comparing markets, it's about seeing historic business tactics. nVidia has a long history of shitty business tactics including illegal ones. If you think nVidia will abruptly change business tactics and become super nice and helpful, good for you. I'm not gullible enough to believe anything would change.
VERY different markets. They’ll also be compelled by legal agreements to continue licensing and not fuck around too much. They can get away with a lot of BS state-side, but a lot of tactics won’t fly in the EU or in Asian regions.
It's likely many of the license agreement are only for a set period of time. Once they run out there's no reason for nVidia not to change them. You're also assuming there's no legal recourse to changing even the agreements which may be in perpetuity. There's also the likelihood of nVidia simply changing the way ARM is developed. Is there some legal requirement that any and all changes nVidia would make would be required to be licensed out to anyone? What happens if nVidia deprecates the current architecture and puts development into spinoff which is different, better and which isn't covered under any current license agreement.

Like the previous poster you're counting on nVidia to completely change business tactics which I find highly unlikely.

You're also expecting nVidia to act like the current owner of ARM. The current owner is in more of a caretaker role designed to sell the company off for a profit. They weren't looking to dominate a market with exclusivity which is nVidia's normal operating pattern.
 
It's not about comparing markets, it's about seeing historic business tactics. nVidia has a long history of shitty business tactics including illegal ones. If you think nVidia will abruptly change business tactics and become super nice and helpful, good for you. I'm not gullible enough to believe anything would change.

It's likely many of the license agreement are only for a set period of time. Once they run out there's no reason for nVidia not to change them. You're also assuming there's no legal recourse to changing even the agreements which may be in perpetuity. There's also the likelihood of nVidia simply changing the way ARM is developed. Is there some legal requirement that any and all changes nVidia would make would be required to be licensed out to anyone? What happens if nVidia deprecates the current architecture and puts development into spinoff which is different, better and which isn't covered under any current license agreement.

Like the previous poster you're counting on nVidia to completely change business tactics which I find highly unlikely.

You're also expecting nVidia to act like the current owner of ARM. The current owner is in more of a caretaker role designed to sell the company off for a profit. They weren't looking to dominate a market with exclusivity which is nVidia's normal operating pattern.

I just don't see it. Nvidia is dealing with companies that are 10x to like 100x bigger than it, and they have no reach into this market. Why would they shut all their partners out, especially since they don't have competing products?
 
I just don't see it. Nvidia is dealing with companies that are 10x to like 100x bigger than it, and they have no reach into this market. Why would they shut all their partners out, especially since they don't have competing products?
Here's a quote from Dune that sums it up. "He who controls the spice, controls the universe."

That's basically nVidia and if nVidia has what amounts to sole control over ARM, what makes you think they'll do an about-face with how they do business? Those companies licensing ARM are not partners, they are licensees. They've also put a lot of time, effort and money into designing products around ARM and in many cases exclusively. Dropping ARM and swapping to a different microarchitecture is not something done quickly, easily or cheaply. For some companies it would literally be impossible. That's the exact position nVidia loves to see customers in and they will exploit it. It won't be done day one but it will be done eventually.

I don't trust nVidia or nVidia business practices and for good reason considering history. Why anyone else trusts nVidia I can't understand.
 
Nvidia would certainly change things. They all say (during an acquisition) that business will be as usual, but it never happens in real life.

But would those changes be for the better or worse, we don't know. In any case, I think Nvidia would do a good job, and they are one of the better companies to have that control (versus someone like Apple, etc.).
 
Here's a quote from Dune that sums it up. "He who controls the spice, controls the universe."

That's basically nVidia and if nVidia has what amounts to sole control over ARM, what makes you think they'll do an about-face with how they do business? Those companies licensing ARM are not partners, they are licensees. They've also put a lot of time, effort and money into designing products around ARM and in many cases exclusively. Dropping ARM and swapping to a different microarchitecture is not something done quickly, easily or cheaply. For some companies it would literally be impossible. That's the exact position nVidia loves to see customers in and they will exploit it. It won't be done day one but it will be done eventually.

I don't trust nVidia or nVidia business practices and for good reason considering history. Why anyone else trusts nVidia I can't understand.

You really think that if Nvidia says screw you and somehow make ARM exclusive to themselves, the whole industry wouldn't just transition to Mediatek? I have no idea regarding ARM licensing agreements, but I am pretty confident in saying that the expiry date on those existing for ARM's current partners will be a long way away from expiring. During that time, it's very feasible to design from scratch new products based around Mediatek's chips.

Oh and that'll also piss off Google and Microsoft, and along with them the 2 most popular OSes in the world. Google develops using ARM, Microsoft and Amazon has infrastructure based on ARM. Is Nvidia gonna go full Linux now?

You see, I'm not saying that Nvidia is a saint, but business-wise there's no reason to piss everybody off and make ARM exclusive, they'll lose so much more than they gain.

Do tell me what Nvidia gains from making ARM exclusive, since I for one don't see any.
 
Yeah, it doesn't make sense. ARM licenses their tech, meaning the customers are the companies designing hardware around ARM.

If Nvidia strong-armed or otherwise pissed off their customers they would lose a ton of money. It's not good business.
 
You really think that if Nvidia says screw you and somehow make ARM exclusive to themselves, the whole industry wouldn't just transition to Mediatek? I have no idea regarding ARM licensing agreements, but I am pretty confident in saying that the expiry date on those existing for ARM's current partners will be a long way away from expiring. During that time, it's very feasible to design from scratch new products based around Mediatek's chips.

Oh and that'll also piss off Google and Microsoft, and along with them the 2 most popular OSes in the world. Google develops using ARM, Microsoft and Amazon has infrastructure based on ARM. Is Nvidia gonna go full Linux now?

You see, I'm not saying that Nvidia is a saint, but business-wise there's no reason to piss everybody off and make ARM exclusive, they'll lose so much more than they gain.

Do tell me what Nvidia gains from making ARM exclusive, since I for one don't see any.
Yes, nVidia will screw anyone and everyone over in any way possible. That's what they've always done. Talk to any company nVidia has "partnered" up with and you'll find that all of them came away with a horrible experience and will not work with them again. In case you are unaware this includes Intel.

Again, show me the reasons why nVidia's business practices would change overnight. Until you can show that with unassailable proof there is no reason to believe nVidia ownership of ARM would be a positive for anyone but nVidia.
 
Yeah, it doesn't make sense. ARM licenses their tech, meaning the customers are the companies designing hardware around ARM.

If Nvidia strong-armed or otherwise pissed off their customers they would lose a ton of money. It's not good business.
That never stopped nVidia before. Original Xbox through GPP proves this.
 
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