Nvidia announced last week that it intends to buy ARM for $ 40 billion... The amount is rather big, even for a technologicalsector, but apart from the fact that $ 40 billion is a tenth of Tesla, this deal is not very clear. How will this event affect the computer industry? What does this have to do with developments related to artificial intelligence? What will happen to mobile devices, most of which use the ARM architecture? Below we will try to answer these questions.
- 1 What is Arm
- 2 Why Nvidia bought ARM
- 3 What will happen to other companies after the purchase of ARM
- 4 How smartphones will change after buying Nvidia ARM
- 5 How the ARM acquisition will affect the gaming industry
What is Arm
Let's say right away, ARM is a company (ARM Holding),but it's also the processor architecture that ARM developed. Its full name is Advanced RISC Machines, by the way, hence the abbreviation "ARM". It develops, designs, and licenses the ARM processor architecture. And companies like Qualcomm, Apple, and Samsung are developing their processors based on ARM.
Almost all devices, having small dimensions and equipped with a battery, have processors built on the ARM architecture.
ARM Holding offers two types of licenses for its technologies. The first regarding the design of the chipsets: the manufacturer pays ARM money, develops its processors using mostly ARM technologies, including its design. This is the simplest option used by many smartphone manufacturers. Second the variant implies using exclusively the ARM architecture.
That is, another corporation has the right to doown processor with its own design and other features. Few people work this way, one such company is Apple, which makes ARM-based processors for the iPhone and iPad, and now chips for Mac computers (Apple Silicon).
So you have no idea how important this London-based company with an uncomplicated name of three letters is. But why did ARM want Nvidia?
Why Nvidia bought ARM
During the discussion of the deal, representatives of Nvidiasaid ARM's core business strategy will remain independent. Nvidia is buying ARM in part to gain access to its vast array of licensing partners, and these companies can continue to use ARM's intellectual property as before. But did Nvidia just need ARM licensees? Of course not.
Contrary to popular belief, Nvidiamanufactures more than video cards and graphics chips. It also supplies chips for data centers, data centers and artificial intelligence computing systems. The company has adapted its GPUs to handle massive amounts of data and outperformed its competitors in many ways, including Intel.
Nvidia is already on $ 100 billion more expensive than Intel.
Nvidia will be able to freely useARM technology while integrating proprietary solutions. After the completion of the deal, Nvidia plans to build a huge data center to research artificial intelligence technologies that can be used in various fields. It will have an ARM-based supercomputer.
However, Nvidia's goals go far beyond AI. The purchase of ARM guarantees its dominance in the global market - cloud data centers... Nvidia has only one competitor left there - Intel, and with the help of ARM it will be able to move it. How? There are at least two reasons:
- modern smartphones use large amounts of data, for which ARM chips are best suited;
- advances in technology and 5G will only increase the need for information processing, ARM is better at this than Intel.
You don't have to look far for an example: TSMC, the processor maker that moved to ARM, has become one of the industry leaders, leaving Intel behind.
Buying ARM solves all of Nvidia's problems withIntel and takeover of the server market. The company will end its dependence on Intel and AMD and will be able to seamlessly combine high-performance ARM processors with its own GPUs.
It is not for nothing that this deal is called one of the most important in recent decades. This was last seen in the 1980s, when the PC market was just emerging.
What will happen to other companies after buying ARM
Nvidia - currently an ARM client - notes thatthe company will maintain its operational independence. In the sense that it will continue to operate as a subsidiary rather than being incorporated into Nvidia. In other words, the deal won't hurt other companies or ARM personnel. This is important because ARM's core IP licensing business will remain the same. Various partners that currently license ARM technology, such as mobile giants Apple and Qualcomm, may continue to do so. However, we don't yet know if Nvidia will end up using ARM technologies for future proprietary projects.
Another question is whether this deal will take place at all. Although in fact the American company buys the British one, it is necessary to take into account the interests of China. ARM has many partners in China, and if the company becomes American, the US could theoretically impose sanctions and cut off Chinese vendors' access to ARM technologies. Yes, they can do it. Therefore, the deal must be approved by the antimonopoly authorities of the USA, Great Britain and China.
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So far, ARM is owned by the Japaneseinvestment company SoftBank. ARM Holding was acquired by it in 2016 for $ 32 billion. The demand for ARM chips increased in the following years; by the end of 2016, more than 95 billion of these chips were sold worldwide (17.7 billion in 2016 alone). As of the end of March 2020, the cumulative number of ARM chips sold exceeded 160 billion. There was no conflict of interest when the company was owned by SoftBank. Nvidia is another matter entirely.
How smartphones will change after buying Nvidia ARM
All modern processors (systems-on-a-chip, they are SoC) for smartphones are built using ARM andother technologies, so this deal will have serious implications for future mobile processors. Arm's high-profile partnerships include Apple, Qualcomm, Samsung and many more. These companies can continue to access existing and future ARM component designs as well as their architecture licenses. But where are the guarantees that at one point Nvidia will not change its mind and take all the technologies for itself? In this case, the smartphone market is facing a huge blow. This scenario is unlikely, but cannot be completely ruled out.
Nvidia is best known for its graphicsprocessors, so many in our Telegram chat have a question whether the processors of future smartphones can contain Nvidia graphics chips. So far, it is known that the existing graphics solutions ARM - Mali, will not go anywhere. ARM Mali caters to a wide range of devices, from TVs to smartwatches, and Nvidia will not force existing ARM customers to upgrade to something new. Until.
Don't bet on what you'll see soon smartphone with Nvidia GPU... But in the future, this may become a reality.
It's also worth noting that Qualcomm hasAdreno's own GPU development team, and Samsung has struck a deal with AMD for future chipsets. So there is currently no obvious partner for smartphones with Nvidia graphics.
How the ARM acquisition will affect the gaming industry
ARM and GeForceare likely to remain isolated areasbusiness Nvidia. We may feel the impact of the ARM purchase on the overall corporate budget, as Nvidia seems to be hoping to use its GPUs to license high-budget customers who are now ARM partners. But this potential financial injection is likely to happen only when the dust settles and ARM starts to pay back its investment. So far, Nvidia hasn't said the ARM purchase will somehow affect its graphics cards.
Of course, this is a longer term perspective,which will be implemented over the next decade. In the meantime, Nvidia will have to balance the expectations of existing ARM customers with its drive to conquer future markets, from data processing to AI and graphics in smartphones. This can be a daunting task if existing partners decide to renegotiate their agreements in light of this purchase. Now regulators must decide whether this purchase is in the broader interests of the technology industry.