[HN Gopher] SoftBank's plan to sell Arm to Nvidia is hitting ant...
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SoftBank's plan to sell Arm to Nvidia is hitting antitrust wall
around the world
Author : lawrenceyan
Score : 313 points
Date : 2021-01-24 09:36 UTC (13 hours ago)
(HTM) web link (asia.nikkei.com)
(TXT) w3m dump (asia.nikkei.com)
| wyuenho wrote:
| I don't understand why Softbank won't just put it back to the
| public market and list on the LSE.
| ur-whale wrote:
| >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.
| mumblemumble wrote:
| 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.
| ksec wrote:
| They will have a hard time to try and convince the public to
| buy ARM's shares at P/E 100.
| twic wrote:
| Even better - direct listing on WallStreetBets.
| ryebit wrote:
| 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.
| burgerquizz wrote:
| 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/
| selectodude wrote:
| Intel is still rather undervalued. PE of 11, huge amounts
| of cashflow, one big chip win and they're back.
| mirekrusin wrote:
| Intel just lost all engines in-flight. They're still
| flying, yes, but gravity will do its thing.
| mahkeiro wrote:
| We keep reading this but Intel is not just CPUs... and
| the CPU are currentky not the best but not that bad
| either.
| riking wrote:
| Yeah, Intel needs some major direction changes before
| I'll be comfortable investing in them.
| jacquesm wrote:
| 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.
| IshKebab wrote:
| P/E isn't everything. People know those earnings are
| going to tank very soon.
| ineedasername wrote:
| In this case the markets seem to have priced in a low
| probability of Intel getting that big win.
| id wrote:
| >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.
| tcldr wrote:
| Absolutely. I really would like to understand why Soft Bank
| don't do this. UK gov should do everything it can to encourage.
| StringyBob wrote:
| 2020 was a long year - this was just 6 months ago:
| https://www.spglobal.com/marketintelligence/en/news-insights...
| Havoc wrote:
| 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
| michaelt wrote:
| ARM is 100% equipped to deal with red tape and PR; it was
| public until 2016 when SoftBank brought it.
| wyuenho wrote:
| 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.
| pid_0 wrote:
| Good, as it should. No company that competes with ARM customers
| should ever own ARM.
| ausjke wrote:
| 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
| throwaway4good wrote:
| 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)?
| vermilingua wrote:
| Because SoftBank is Japanese and they'd have no choice?
| ginko wrote:
| You're severely underestimating the Chinese government's
| ability to sanction nvidia and softbank if they went forward
| without their approval.
| mbit8 wrote:
| in which way? china seems more like a toothless tiger in
| this regard
| petra wrote:
| They could ban the manufacturing of anything with an ARM
| core, in China, in the extreme case.
| cwhiz wrote:
| That would be an epic own goal. The west is desperate to
| reduce chip manufacturing reliance on China.
| greatpatton wrote:
| Can you tell me which chips are produced in PRC? (Not
| Tawain and TSMC)
| nicoburns wrote:
| 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.
| adventured wrote:
| 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.
| ayewo wrote:
| 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...
| nicoburns wrote:
| 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.
| cwhiz wrote:
| 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.
| someperson wrote:
| 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).
| opless wrote:
| Have you noticed that there's a scramble to RISC-V?
| greatpatton wrote:
| 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.
| boboche wrote:
| Wait till China pulls a hong kong on taiwan. It will be
| clearer...
| megablast wrote:
| Just wait until something that might never, to happen.
| Ok.
| ginko wrote:
| 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.
| perfopt wrote:
| 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
| erikpukinskis wrote:
| C-word is probably a typo, but flagging anyway.
| cbozeman wrote:
| You are truly the chink in this person's armor.
| ginko wrote:
| 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...
| jackjeff wrote:
| 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.
| michaelt wrote:
| 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.
| adventured wrote:
| 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.
| sounds wrote:
| 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?
| dirtyid wrote:
| 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.
| ksec wrote:
| 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.
| api wrote:
| 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.
| nitrogen wrote:
| MIPS and RISC-V for CPUs; AMD, Intel, and others for PC
| and embedded GPUs.
| stingraycharles wrote:
| 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.
| linker3000 wrote:
| 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...
| mepian wrote:
| China successfully blocked the sale of NXP to Qualcomm,
| as said in the article. Neither company was Chinese.
| 1996 wrote:
| 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 :-)
| f6v wrote:
| The US even subdues foreign governments to get out of
| contracts with the companies the US doesn't like.
| throwaway4good wrote:
| If you read the article it appears that the Chinese
| authorities have considerable powers.
| InTheArena wrote:
| 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.
| verall wrote:
| 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.
| varispeed wrote:
| It's like selling it to Apple. I hope this will be stopped.
| thekyle wrote:
| I wonder why they don't just do a direct listing and sell it to
| retail investors.
| throwaway4good wrote:
| That is a good question; I assume the answer is that they
| cannot get a 40B valuation if they IPO.
| martinald wrote:
| 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.
| throwaway4good wrote:
| 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.
| Wronnay wrote:
| 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...
| gigatexal wrote:
| M1 is arm instructions apple design.
| vitno wrote:
| This still requires a fairly pricey license from Arm to
| use the ISA
| Tsiklon wrote:
| Apple helped found ARM, I would be very surprised if they
| didn't receive favourable terms on an eternal license.
| [deleted]
| amelius wrote:
| They could also simply hire the ARM employees for a lot
| less than $40B over the near future.
| kelnos wrote:
| That doesn't really help them all that much, at least not
| for the reasons why owning ARM could be useful: the IP.
| amelius wrote:
| My understanding was that Apple already reimplemented
| large parts of the IP and that they are now mostly a
| licensee of the ISA.
| vinay_ys wrote:
| 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.
| thewindowmovie5 wrote:
| 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.
| amelius wrote:
| 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.
| floatboth wrote:
| Apple never used any 64-bit cores from Arm. Their own
| Cyclone was developed in parallel with Arm's Cortex-A57.
| runawaybottle wrote:
| You must have not seen the trajectory equities are on now
| days. 40b would be an absolute joke to achieve by end of
| year.
| andy_ppp wrote:
| Because it's worth more to nvidia would be my guess?
| Ericson2314 wrote:
| A good indication of an anti-trust violation, if there ever
| was one!
| macleginn wrote:
| By this logic, every acquisition involving a premium is a
| an anti-trust violation.
| Ericson2314 wrote:
| I mean every consolidation _is_ bad for competition in
| the first order. There are just sometimes higher order
| ameliorating effects.
| thethimble wrote:
| 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).
| satellite2 wrote:
| 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.
| andy_ppp wrote:
| Yes.
| AntiImperialist wrote:
| Definitely not. That has nothing to do with anti-trust
| violation.
| robert_foss wrote:
| 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.
| kevingadd wrote:
| 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.
| seabrookmx wrote:
| Lots of Nvidia SoCs in cars too, Tesla's being one example.
| Keyframe wrote:
| I think it's more of Nvidia wants to get into ARM's sales
| channels. CPU side of things is additional benefit.
| robert_foss wrote:
| The things is that NVidia by being a competitor in many
| spaces, would wreck those very same sales channels.
| tyingq wrote:
| 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?
| GoOnThenDoTell wrote:
| They'd just do RISCV instead
| odiroot wrote:
| How about Broadcom (assuming they'd be big enough)?
| robert_foss wrote:
| 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.
| nicoburns wrote:
| > 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.
| m-p-3 wrote:
| But if they own it they'll have the sweet licensing money
| coming in.
| autoditype wrote:
| 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
| ksec wrote:
| 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.
| laurencerowe wrote:
| 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.
| wizzwizz4 wrote:
| But it's slower. What about those quarterly profits!?
| freeAgent wrote:
| They already have ARM SoCs which are used in their own Shield
| TV and other devices.
| yehaaa wrote:
| 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.
| kevingadd wrote:
| 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"
| sitkack wrote:
| 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.
| lima wrote:
| > _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.
| IshKebab wrote:
| 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.
| colejohnson66 wrote:
| Doesn't the ARM ISA license already allow for extensions?
| I know Apple's chips are full of them.
| wmf wrote:
| 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.
| ksec wrote:
| >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.
| rrss wrote:
| 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?
| ksec wrote:
| 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.
| dralley wrote:
| Nvidia already has an ARM license, even.
| DaiPlusPlus wrote:
| 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?
| [deleted]
| abainbridge wrote:
| 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.
| ksec wrote:
| Having an ARM license has zero relationship with
| performance.
|
| An ARM license is only for unit cost benefits. Nothing
| else.
| HissingMachine wrote:
| 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.
| ineedasername wrote:
| Or just let it go public. It doesn't have to be owned by
| anyone else.
| Scipio_Afri wrote:
| It was public, it went private when Softbank bought it. No
| reason it can't go public again, though.
| ckdarby wrote:
| > 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.
| rektide wrote:
| 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/
| jacquesm wrote:
| 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.
| datameta wrote:
| 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.
| tsomctl wrote:
| 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.
| PaulHoule wrote:
| 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.)
| AntiImperialist wrote:
| I can think of one worse owner of ARM: AMD. Make that two:
| Intel.
| QuinnyPig wrote:
| Intel or Oracle would be two.
| Abishek_Muthian wrote:
| >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.
| nabla9 wrote:
| 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...
| klelatti wrote:
| 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...
| skibz wrote:
| 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/
| klelatti wrote:
| 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.
| mromanuk wrote:
| I hope Arm continue to be independent, it's too important
| goatinaboat wrote:
| The UK government should buy back ARM, it's a strategic national
| asset, as is IMG.
| LatteLazy wrote:
| 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
| PS100m on "consulting" from a tory donor?
| ClumsyPilot wrote:
| '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
| LatteLazy wrote:
| 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.
| Rochus wrote:
| 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.
| tonyedgecombe wrote:
| They seem to be changing their position on this:
|
| https://www.theguardian.com/business/2020/jul/03/uk-buys-
| sta...
| Rochus wrote:
| 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.
| mirekrusin wrote:
| With savings from brexit I'm guessing?
| WJW wrote:
| 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.
| jayflux wrote:
| > 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.
| kelnos wrote:
| Sure, but there are other, much more politically tenable
| ways to keep Intel under US ownership than nationalizing
| the company.
| guerrilla wrote:
| > 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.)
| Lio wrote:
| 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.
| klelatti wrote:
| > 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...
| noncoml wrote:
| 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?
| klelatti wrote:
| 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
| noncoml wrote:
| Very interesting, thanks. The guy to the right of him is
| completely in denial. He was so confident MIPS "will win in
| the end"
| klelatti wrote:
| 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!
| klelatti wrote:
| 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.
| gigatexal wrote:
| Good I hope the whole sale fails
| askjdlkasdjsd wrote:
| 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.
| Ericson2314 wrote:
| Your peddling of nonsense while taking the moral high ground
| is sickening:
|
| 1. https://en.wikipedia.org/wiki/Arm_Ltd.#Founding this is no
| startup with some glorious founder-lifer figure trying to
| cash out into retirement.
|
| 2. Even if it was, rampant acquisitions are terrible for
| society, and we shouldn't let startups off easy for cashing
| out. The just costs are just too high.
|
| (Yes, appealing to self sacrifice that leads to coordination
| failure, but some sort of pact among startups to merge with
| each other rather be bought by the monopolists along with
| sane anti-trust would do the trick.)
| intrasight wrote:
| He's just expressing his opinion and it one likely shared by
| many other people.
| gigatexal wrote:
| 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.
| staticman2 wrote:
| Who is the hard worker in this statement? A corporation is
| literally a set of legal documents. No human was discussed at
| all.
| tsomctl wrote:
| 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.
| ThrowawayR2 wrote:
| 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.
| gigatexal wrote:
| 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.
| AlexandrB wrote:
| 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.
| Ceezy wrote:
| 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.
| aurizon wrote:
| 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.
| lotsofpulp wrote:
| > 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?
| aurizon wrote:
| If Nvidia instructs ARM to do so, as 100% owner...
| stevehawk wrote:
| apple has a forever license on ARM, nvidia can't do
| anything about that
| aurizon wrote:
| Is the fee also fixed?
| lotsofpulp wrote:
| Why would ARM (Softbank) not already be asking for as much
| money as Apple is willing and able to play?
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