[HN Gopher] Proposed acquisition of ARM Limited by NVIDIA: publi...
___________________________________________________________________
Proposed acquisition of ARM Limited by NVIDIA: public interest
intervention
Author : marc__1
Score : 365 points
Date : 2021-04-19 12:10 UTC (10 hours ago)
(HTM) web link (www.gov.uk)
(TXT) w3m dump (www.gov.uk)
| bassdropvroom wrote:
| Can anyone more knowledge than me on these matters explain what
| this means as far as what the UK can and might do? Also, what has
| the UK done historically when it has invoked powers set out by
| this Act?
| thu2111 wrote:
| It appears that at the moment all this means is there will be
| an investigation and a report. Presumably, any action taken to
| block the sale will have to wait until after that.
| abrowne wrote:
| Interesting that they mention a lot of prices with a dollar sign
| without specifying the currency or converting any of the amounts
| to GBP.
| wAYshzRtw wrote:
| > Under the powers set out in the Enterprise Act 2002, the
| Secretary of State for Digital, Culture, Media and Sport is able
| to intervene on national security grounds.
|
| > The Competition and Markets Authority (CMA) will prepare a
| report on the competition and national security aspects of the
| proposed transaction.
|
| So it's being framed as a national security threat, interesting.
| eptcyka wrote:
| It'll be interesting to see how they can justify Nvidia's
| ownership of ARM a security threat, whilst ARM being owned by a
| Japanese investment bank being _just fine_. What's the
| difference?
| ClumsyPilot wrote:
| Its obvious, firstly the bank is not going to mess with chips
| designs and block off customers the way Nvidua might becauae
| to it, they are conpetitirs.
|
| Secondly, Nvidia will probably restructure / absorb ARM. At
| the moment its corporate structure is mostly intact
| toxik wrote:
| This is actually a fairly common way to justify protectionist
| and interventionist policy. It's "think of the children" in a
| new disguise, really.
|
| But such is policy making. You have to justify your policy with
| what is popular, not with the truth. For example: lax covid
| restrictions justified because we can't be sure it'll work, vs.
| because we know that it'll hurt the economy.
| wAYshzRtw wrote:
| Makes sense. I think it's going to be a lot more difficult
| for Nvidia to argue against this, rather than if the
| intervention had been about competition or something.
| ajdlinux wrote:
| And in the case of issues that could touch on foreign trade
| or investment treaties, you may have to justify your policy
| using certain exceptions such as "national security".
| bun_at_work wrote:
| I agree with your view on political rhetoric, however, that
| doesn't mean these things aren't issues of national security.
|
| Having access to the fastest chips is a matter of national
| security, at least for the US. The AI race (even if it's just
| faster NN processing) has massive implications for modern
| warfare and national security.
| DrBazza wrote:
| I wonder if it will get squeezed into this:
|
| https://www.cpni.gov.uk/critical-national-infrastructure-0
|
| "In the UK, there are 13 national infrastructure sectors:
| Chemicals, Civil Nuclear, Communications, Defence, Emergency
| Services, Energy, Finance, Food, Government, Health, Space,
| Transport and Water. Several sectors have defined 'sub-
| sectors'; Emergency Services for example can be split into
| Police, Ambulance, Fire Services and Coast Guard.
|
| ...the loss or compromise of which could result in:
|
| a) Major detrimental impact on the availability, integrity or
| delivery of essential services - including those services whose
| integrity, if compromised, could result in significant loss of
| life or casualties - taking into account significant economic
| or social impacts; and/or
|
| b) Significant impact on national security, national defence,
| or the functioning of the state.' """
| toyg wrote:
| "On national security grounds"...? Why would NVidia, a US corp,
| be more of a security problem than a Japanese one? If it's just a
| matter of commercial overreliance on a single supplier, I find
| the "National security" bit to be somewhat specious.
| [deleted]
| wAYshzRtw wrote:
| Because the nature of this acquisition is completely different.
| SoftBank left Arm mostly alone; i.e. brand survived, all
| offices survived, etc. If this deal goes through, Arm will get
| fully integrated into Nvidia. There won't be an "Arm" anymore.
| bserge wrote:
| Is that how it would be? So, like AMD and ATi? Damn, that's
| kind of sad.
| michaelt wrote:
| Who can say?
|
| But the British government has experience, from the Kraft
| purchase of Cadbury, that even if the buyers promise to
| keep jobs in the UK and product quality high, once the deal
| goes through they can renege on those promises instantly
| with no negative consequences.
| toyg wrote:
| I reckon all Western countries have gone through some
| sort of experience of this. Corporations will do the
| deal, reap the rewards, and next week or next year
| they'll just do as they please - because the concept of
| honour is too human to be expected of an artificial
| construct.
| wAYshzRtw wrote:
| Yes, that's the plan.
| [deleted]
| klelatti wrote:
| See my other comment. Because Arm might be working with GCHQ
| and Arm / Nvidia might stop that and work with NSA - unlikely
| to be an issue when Softbank owned.
| sremani wrote:
| Because UK when they discuss Trade Agreement with 'Murica needs
| some chips for leverage.. I am pretty sure, someone is still
| kicking themselves (in UK) for the deepmind's Google purchase.
|
| It is prudent for the world we are ushering into. I do not
| blame them. The world in which ARM was bought by SoftBank is
| different literally and figuratively.
| croes wrote:
| Are Snowden and his reveals already forgotten?
| Redoubts wrote:
| Not sure what you mean, he revealed the UK gov was a willing
| co-conspirator.
| mhh__ wrote:
| _Enthusiastic_ not just willing
| martin8412 wrote:
| Have you seen the foreign policies of Japan vs. the US? Japan
| is entirely more reliable than the US where the foreign
| policies can change at a whim every four years.
| jarym wrote:
| Well someone woke up while sleeping at the wheel. My concern is
| that The Competition and Markets Authority (CMA) has no real
| business to be evaluating national security issues.
| klelatti wrote:
| I've been struggling to understand why Nvidia's takeover of Arm
| might be a UK national security issue (the competition case is
| quite clear but separate).
|
| I'm guessing though that Arm collaborates with UK intelligence
| agencies and that that collaboration might be jeopardised with
| the Nvidia takeover (in a way that it was not with the Softbank
| takeover). Does anyone have any further insights?
| sgt101 wrote:
| I think it's a national capability to do things move - probably
| sharpened by the realization (in the middle of the pandemic)
| that not everyone was a friend of the UK and would quite
| happily watch us drown while sitting round singing songs about
| how many lifebelts they had.
| klelatti wrote:
| I'm sceptical about that - we don't own much technology IP
| and we're hugely reliant on the US already.
|
| I think it's a much more specific security issue.
| cmrdporcupine wrote:
| Being dependent on the US turns out to be not a great
| strategic scenario in this decade.
|
| (Speaking as a Canadian who has watched 30 years of
| continental economic integration and heard lots of friendly
| talk since the campaign for the 1988 Free Trade Agreement
| but now back of the line waiting for vaccines imported from
| Europe because the US won't export to us and our domestic
| manufacturing was sold off decades ago because of said
| continental integration.)
|
| Also the US itself has used the "national security" excuse
| for trade issues multiple times over the last few years
| where it was seemingly not the case (steel & aluminum trade
| disputes, etc). So the precedent has been set. And there's
| little sign of Biden really doing much to reverse that.
| outside1234 wrote:
| Well, ok, but if you are going to go that route you also
| have to note that the US pays for your national defense
| as well to be balanced.
|
| That said, what Trump pulled with steel and aluminum is
| BS.
| cmrdporcupine wrote:
| National defense so we can defend ourselves from
| opponents that the US created, or act as an imperial arm
| for American interests?
|
| Seem to recall some very agitated US commentators bashing
| Canada when we chose not to enter the second war in Iraq.
| How's that working out for you, BTW?
| Hiopl wrote:
| And it's time we all stopped being that dependent on the
| US, considering how unreliable and untrustworthy they
| are.
| sgt101 wrote:
| I think that the capability to design a modern CPU is
| pretty essential for future defence independence. I think
| that ARM represents a good chunk of the UKs claim to be
| able to do that. If the UK wants a share of future US
| programs of all sorts then it needs to be able to make
| these claims - or face must less generous terms.
| klelatti wrote:
| What's the point of being able to design CPUs if we can't
| make them? We certainly don't have defence independence
| at all.
|
| I'm not sure about the second point but it seems premised
| on withholding IP from US which seems unlikely.
|
| Much more likely that there is intense collaboration
| between say GCHQ and Arm (maybe both ways -> GCHQ gets to
| understand modern CPU security issues from Arm and Arm
| benefits from GCHQ input on threats). If that
| relationship swaps to NSA then there would be real damage
| to UK security apparatus.
| dijit wrote:
| We get our panties in a bunch (and I do too) about the
| real high end fabs for CPUs, but push-come-to-shove there
| _are_ fabs in the UK.
|
| Infineon (German owned) and Nexperia (Dutch owned) both
| own fabrication plants in the UK, so it's possible to
| scale that up if we were at war, the knowledge is here.
| klelatti wrote:
| Fair comment but no one is suggesting that we'll lose
| access to CPU designs that work on older nodes so the
| point still doesn't really stack up.
| nottorp wrote:
| > What's the point of being able to design CPUs if we
| can't make them? We certainly don't have defence
| independence at all.
|
| If you needed them for defence I'm sure you could set up
| a fab on older process nodes fairly fast. A tank consumes
| and generates so much power for moving that it doesn't
| matter if the CPUs in it will last only 2 hours in a cell
| phone...
| valdiorn wrote:
| The current silicon chip shortage is showing just how dependent
| we are on chips, and while Arm doesn't have their own fabs,
| they are an important part of that ecosystem. There's a good
| chance that the current drought may play a role in US decisions
| on dealing with the China/Taiwan issue, if China shows
| aggression there is now a clear national security incentive for
| the US (and other countries, for that matter) to intervene and
| protect Taiwan, just like they did with oil for the last 40
| years.
|
| given that, it's entirely reasonable that the UK doesn't want
| ARM gutted and the IP shipped out of the country.
| nottorp wrote:
| You think espionnage, I think a key IP asset.
|
| ARM is a piece of infrastructure now, and dangerous in the
| hands of NVidia for other reasons than spying. Mostly
| economical. And yes, that's also national security.
| selfhoster11 wrote:
| All the more reason to dump funding into RISC-V and drop ARM.
| CPU architectures and instruction sets shouldn't be in the
| private hands.
| nottorp wrote:
| Who owns the RISC-V IP now? There may be lots of open
| source projects but I don't think the IP is in the public
| domain, is it?
| astrange wrote:
| UC Berkeley.
|
| Insofar as ISAs matter for performance, RISCV is not as
| good as ARMv8 since the designers are too academic, but
| it might be good enough.
| klelatti wrote:
| Actually I don't think espionage primarily - more cyber
| defense against bad actors both state and private.
| nottorp wrote:
| How about more basic things:
|
| From now on, every ARM processor costs $40 per chip to
| license. Except, of course, those made by NVidia.
|
| or
|
| From now on, all improvements to the reference ARM
| architecture will only be available in NVidia chips for the
| first two years. Afterwards they'll be available for
| licensing at the current costs.
|
| Those are monopoly issues. And now a national security
| issue:
|
| From now on, $RANDOM_EUROPEAN_COUNTRY is under embargo wrt
| to US intellectual property. NVidia being an US company,
| that includes ARM reference designs. Basically what
| happened to Huawei with the OS, except now it includes the
| CPUs too.
|
| And I could go on...
| klelatti wrote:
| Which is why there are distinct competition
| investigations going on in UK, EU and elsewhere.
|
| I think you're overdoing the last point: there is lots of
| key technology licensed from US firms and no-one in the
| UK thinks that this is a major national security issue.
|
| Much more likely that there is a specific issue that UK
| government has identified that poses a realistic problem
| for UK security services.
| Woodi wrote:
| I hope correct timeline here:
|
| - EU drops plans to license ARM and start to obviously fail to
| buid their own arch - Softbank announces it want to get rid of
| ARM - Nvidia want, UK agree - Apple announces M1 - Nvidia
| announces Grace - LG drop making phones - China announces cpu
| independence - UK oh noes, our treasure ! - suddenly "own" arch
| is good ? LOL
|
| If it is just money for Nvidia deal need to be preserved.
|
| But Apple and Nvidia are Intel killers now and noone saw
| potential in ARM ? More likely ARM wanted to ditch UK. Or rather
| top managers was talking with US buyers earlier... Like Altavista
| execs moved to Google after headshotting own company.
|
| Anyway, whatever - let just x86 die. And pleas, pleas kill MS
| Windows too !! There is astonishing amount of money behind this
| madness. Not to mention "spyware" element in both.
| jedimastert wrote:
| What are the "spyware" elements you refer to in x86?
| astrange wrote:
| Not especially accurate reference to Intel ME / AMD PSP.
| fxj wrote:
| To me this seems to be a reaction to the announcement of nvidia
| to build a one-in-all HPC system. Nvidia already owns Mellanox
| for the Infiniband Network and their GPUs are the fastest on the
| market. Now with an additional CPU in their portfolio they could
| provide a complete Supercomputer in one piece. Think about a HPC-
| SOC. Supercomputers are still a matter of national security.
|
| https://www.nextplatform.com/2021/04/12/nvidia-enters-the-ar...
|
| Also nvidia will build a new system in switzerland with 20
| Exaflops (albeit fp16) which would be the fastest ML/AI system so
| far.
|
| https://www.marktechpost.com/2021/04/16/nvidias-novel-cpu-gr...
|
| FTA: With the help of tight coupling between NVIDIA CPUs and
| GPUs, Alps is expected to train GPT-3, the world's largest
| natural language processing model, in mere two days.
| klelatti wrote:
| Not clear why US should be concerned about the sale to a US
| company?
| CalChris wrote:
| This objection should have been raised for the original sale.
| However, the owners then made bank on that sale and those owners
| also presumably had better political leverage then. Read that as
| _Brits sell crown jewels for coin to foreigners. Foreigners re-
| sell crown jewels but UK discovers public interest and raises
| objection to crown jewels being sold._ It 's a bit late.
| tumblewit wrote:
| Is it possible that Apple is calling their chips Apple Silicon
| for reasons other than marketing? Since Apple now plans to design
| and manufacture chips for all their products it's also possible
| Apple comes up with an ARM compatible instruction set rather than
| ARM instruction set to avoid any issues with ARM being part of
| such takeovers. Just a wild theory since no one has yet (probably
| legal reasons) done a deep dive into the M1 processor.
| hilios wrote:
| There can be no such thing as an ARM compatible instruction set
| that is not an ARM instruction set. Either it supports the
| necessary instructions then it is an ARM instruction (possibly
| super)set or it doesn't then it's incompatible.
| 310260 wrote:
| I would say no if only because it's easier to find talent that
| understands ARM than it is to teach talent about the nuances of
| your own single-platform instruction set.
| capableweb wrote:
| I think that argument would apply in a lot of places but most
| likely it wouldn't apply in Apple that are famous for their
| "not invented here" attitude across the company.
| finikytou wrote:
| ARM is a strategic company and unique in europe. it is UK crown
| jewel. Selling it to Nvidia is like USA selling Google to Huawei.
| seniorivn wrote:
| you should've used european company instead of huawei, with
| huawei you turn it into political and even ideological debate
| finikytou wrote:
| I dont see huawei as ideologically worse than google.
| commentonmips9 wrote:
| after the loss of MIPS to the chinese communist state
| enterprises, it is worth being more careful about ARM ownership
| passing hands too much
| skelter wrote:
| The semiconductor supply chain is now almost completely
| disaggregated ie everyone specialises in just a small part of the
| value chain. ARM's speciality is in CPU design and it has carved
| out for itself the enviable position of being the defacto
| standard for mobile applications - almost every single phone on
| the planet has ARM processor(s) running it. And their products
| are in dozens of other end applications segments as well. These
| chips are embedded in System on Chip IC's and manufactured by
| third party companies like TSMC and UMC etc to end customer
| specifications, like Apple or Samsung for example.
|
| The problem with the original SoftBank deal, and now the Nvidia
| deal, is that these companies will simply hollow ARM out (slash
| R&D, cut staff etc) to pump up the target's value, before
| flogging it off or breaking it up. The stock market doesn't value
| synergies, although it is quite happy to punt this aspect when
| M&A deals are in the offing. Given its strategic position as the
| defacto standard for mobile comms, that's a serious threat.
|
| ARM also gives the UK strategic leverage in any trade
| negotiations. Would we knowingly allow Rolls-Royce Jet Engines to
| be flogged off? No. Ditto ARM.
|
| So, I think this is the right policy and hopefully the government
| will see fit to step into other deals like this and block them.
|
| I've been through a PE acquisition. We were stripped bare and
| bits sold off before finally getting our mojo back. I benefited
| handsomely but we were not the company we were before and the job
| losses in the process were huge. It will be no different with
| Nvidia's proposed take over of ARM.
|
| (disclaimer: I was a semiconductor executive in a global MNC).
| LatteLazy wrote:
| In totally unreleated news negotiations between NVidia and the
| PMs wife to buy a small shed for PS100m have fallen through...
| tokyojoe wrote:
| The semiconductor supply chain is now almost completely
| disaggregated ie everyone specialises in just a small part of the
| value chain. ARM's speciality is in CPU design and it has carved
| out for itself the enviable position of being the defacto
| standard for mobile applications - almost every single phone on
| the planet has ARM processor(s) running it. And their products
| are in dozens of other end applications segments as well. These
| chips are embedded in System on Chip IC's and manufactured by
| third party companies like TSMC and UMC etc to end customer
| specifications, like Apple or Samsung for example.
|
| The problem with the original SoftBank deal, and now the Nvidia
| deal, is that these companies will simply hollow ARM out (slash
| R&D, cut staff etc) to pump up the target's value, before
| flogging it off or breaking it up. The stock market doesn't value
| synergies, although it is quite happy to punt this aspect when
| M&A deals are in the offing. Given its strategic position as the
| defacto standard for mobile comms, that's a serious threat.
|
| ARM also gives the UK strategic leverage in any trade
| negotiations. Would we knowingly allow Rolls-Royce Jet Engines to
| be flogged off? No. Ditto ARM.
|
| So, I think this is the right policy and hopefully the government
| will see fit to step into other deals like this and block them.
|
| I've been through a PE acquisition. We were stripped bare and
| bits sold off before finally getting our mojo back. I benefited
| handsomely but we were not the company we were before and the job
| losses in the process were huge. It will be no different with
| Nvidia's proposed take over of ARM.
|
| (disclaimer: I was a semiconductor executive in a global MNC).
| willvarfar wrote:
| > Would we knowingly allow Rolls-Royce Jet Engines to be
| flogged off?
|
| Not quite a flogging off, but the MiG 15 engine was a copy of
| the Rolls Royce Nene engine which a soviet trade delegation won
| in a bet on a game of billiards.
| Robotbeat wrote:
| Wait, _what_?
| [deleted]
| lend000 wrote:
| I may be ignorant, but aren't ARM designed CPU's (like the A78)
| miles behind their most advanced licensees, like Apple with the
| M1/A12? Isn't most of their value just riding on licenses of
| their established instruction set?
| astrange wrote:
| They sell a lot of much cheaper and smaller cores, even if
| the desktop designs aren't as good. They're also working on
| future designs, not just riding the established ones.
| caslon wrote:
| _ARM also gives the UK strategic leverage in any trade
| negotiations. Would we knowingly allow Rolls-Royce Jet Engines
| to be flogged off? No. Ditto ARM._
|
| Doesn't this/shouldn't this basically encourage countries like
| the United States to completely ignore intellectual property
| laws? If not, why not?
| happymellon wrote:
| Because then people would ignore their IP rules. Which would
| probably be pretty devastating for high profile things like
| Silicon Valley and Hollywood.
| AlphaSite wrote:
| The US has more to loose by people ignoring IP laws imo.
| volta83 wrote:
| You claim that it is in the interest of an ARM CPU vendor that
| wants to buy ARM to cut ARM's R&D and sell it for parts after
| buying it.
|
| What's the rationale of this claim? (you don't say)
|
| I'd expected that ARM CPU vendors are interested in having
| "great" CPUs to sell and having as big of an ecosystem as
| possible.
|
| So my expectation would be that NVIDIA would significantly
| increas - not cut - ARM's R&D budget, and will significantly
| invest in the ARM platform.
|
| On top of this, NVIDIA apparently is trying to cut its reliance
| on Intel and AMD CPUs. I don't see how cutting ARM's R&D budget
| and stripping it for parts would allow them to reach that goal.
|
| This is the opposite of what you claim.
| alexhutcheson wrote:
| It seems surprising to assert that Nvidia would slash R&D after
| the acquisition, considering Nvidia's demonstrated willingness
| to spend enormous amounts of money on R&D, even for speculative
| and risky products. For example, they funded the Project
| Denver/Carmel team for almost a decade, even though the
| resulting microarchitectures didn't seem to have gained
| significant commercial traction.
|
| If this was a sale to a PE firm I think your predictions would
| be more likely, but Nvidia seems really unlikely to be a "slash
| costs and sell it for parts" type of buyer.
| my123 wrote:
| And are still funding that CPU design team, which is
| designing some upcoming products.
| alexhutcheson wrote:
| Didn't realize that - awesome to know. Looking forward to
| seeing their future announcements.
| marktangotango wrote:
| > these companies will simply hollow ARM out (slash R&D, cut
| staff etc) to pump up the target's value, before flogging it
| off or breaking it up.
|
| What does "flogging it off" mean in this context?
| detaro wrote:
| sell something off quickly
| bregma wrote:
| It's a malapropism for "fobbed off", which means to trick
| someone into buying something of inferior quality or value.
| jonplackett wrote:
| Don't think that's right. Flogging something means to sell
| it, usually in a careless kind of manner.
| jorvi wrote:
| This thread is the first time I've ever heard of
| 'flogging' meaning selling something off hurriedly. The
| predominant way I've seen it used is to refer to
| administering punishment via whipping.
| jonplackett wrote:
| yeah it means that too, it's British slang.
|
| INFORMAL BRITISH sell or offer for sale. "he made a
| fortune flogging beads to hippies"
| azalemeth wrote:
| That is indeed the meaning of the verb "to flog". Like
| you would to a horse in the 17th century, to make it go
| faster. "Flogging off" goods to make them move faster is
| a relatively simple leap (and universal British slang).
| ENOTTY wrote:
| Can you describe what you mean by disaggregated?
|
| From what I can tell, there seems to be increasing
| consolidation in the industry:
|
| * AMD -- Xilinx -- ATI
|
| * Nvidia -- ARM -- Mellanox
|
| * Intel -- Altera -- Habana/Nervana -- Mobileye
| LMYahooTFY wrote:
| I think they mean the manufacturing supply chain, which
| supply AMD, Nvidia, and even Intel.
|
| e.g. TSMC <- ASML, and the raw materials providers
| tokyojoe wrote:
| You're talking about M&A (market consolidation) and I am
| talking about the supply and value chain. Two completely
| different things.
|
| The supply/value chain is broken up into little chunks with
| specialists focusing on a narrow activity eg chip design or
| fabrication or assembly or test etc. There are a few
| specialists like AD and TI that are still vertically
| integrated to some extent eg design and fabs, but that's
| because they have specialty analog processes for things like
| opamps , references and so forth. However, a lot of their
| assembly and test is sub contracted out. For digital devices
| and companies like ARM, very few still run fabs
| (semiconductor speak for 'fabrication plant') - they leave
| that to giant fab only companies like TSMC, UMC et al. How
| this works is the fabs run standard processes and companies
| design products to be produced using those processes - so by
| standardising, costs are reduced. A fab process takes 2-3 yrs
| and a few hundred million $ to develop. Samsung and Intel
| still have fabs doing predominantly digital, but they have
| the scale and heft to afford the $1-2 billion every 7 yrs to
| invest in new plants. There are few others though ( mainly in
| memory).
| the_duke wrote:
| You apparently double-posted?
|
| https://news.ycombinator.com/item?id=26862687
| tokyojoe wrote:
| Yeah. Looks like that. :)
| discreteevent wrote:
| Somehow, tokyojoe, I find it hard to picture you, as a
| former semiconductor executive, making two new accounts on
| HN to post the same thing twice. It's just not the kind of
| thing I imagine former semiconductor executives spend their
| days at.
| ksec wrote:
| >is that these companies will simply hollow ARM out (slash R&D,
| cut staff etc) to pump up the target's value, before flogging
| it off or breaking it up.
|
| Given that you were a semiconductor executive in a global MNC,
| may I ask, How?
|
| Now correct me if I am wrong. The whole ARM business model was
| built on the foundation they dont and will not / could not
| squeeze you out once they dominate. They are British, not
| acting like some Giant Tech companies you have across the pond.
| You also get the option to buy _perpetual_ ARM license in
| various form, including ISA and Design in case you are not
| comfortable. i.e There is very little they could do to pump up
| their value. Cutting Opex doesn 't do that.
|
| The whole business model is so well designed to the point it
| doesn't make sense _not_ to sell to SoftBank when they put in
| that ridiculously high offer. (Purely from a Financial
| perspective)
|
| As with the case of TSMC, both ARM and TSMC were not supposed
| to be in the spotlight. They are the backend enabler of the
| industry. And they want their customer to get the attention and
| focus, while they are doing the old boring work. All of that
| changed when Apple jumped into the picture.
| foobarian wrote:
| The thing I don't get about these acquisitions is, if ARM was
| this awesome design shop owning essentially all mobile chipsets
| and then some, why did they need the money? Were they going
| broke?
|
| If so, then it seems like the right thing to do would be to
| nationalize. If not, was it just a leadership decision for
| purposes of expanding the company?
| zepto wrote:
| > if ARM was this awesome design shop owning essentially all
| mobile chipsets and then some, why did they need the money?
| Were they going broke?
|
| It's not the company that gets the money - it's the owners.
| This transaction is about SoftBank's balance sheet, not ARMs.
| foobarian wrote:
| I was thinking more about the original sale. It's looking
| like it was just the board seeing dollar signs, coupled
| with a promise of a huge workforce expansion.
|
| [1] https://www.borntoengineer.com/britains-successful-
| technolog...
| CalChris wrote:
| Moreover, if the UK had a _strategic leverage_ objection
| why didn 't they register that objection at that original
| sale to Softbank?
| foobarian wrote:
| I'm no politician but that promise to double the local
| workforce in Cambridge definitely caught my eye as
| something that would play really well in that arena. Kind
| of like how the Foxconn plant got built in the United
| States.
| zepto wrote:
| Could it be that geopolitics has changed their position
| since then?
| thayne wrote:
| From what I understand, the company that owns ARM (Softbank)
| is having financial problems,and is selling one of its
| successful assets to try and recover.
| tw04 wrote:
| > these companies will simply hollow ARM out (slash R&D, cut
| staff etc) to pump up the target's value, before flogging it
| off or breaking it up.
|
| That's a very real concern with Softbank (and why I questioned
| why regulators were allowing the acquisition in the first
| place). I don't think you can be any further from the mark
| implying that's Nvidia's plan. Nvidia wants ARM to flourish,
| they would have no interest in killing it or selling it off
| once acquired. They already use ARM tech in their Tegra CPUs,
| and in the "Smart" NICs they acquired with Mellanox.
| Additionally they pre-announced a datacenter focused ARM chip
| just last week.
|
| They would have absolutely nothing to gain and a ton to lose if
| they were to kill off ARM or gut the technical talent.
| robert_foss wrote:
| ARM can't flourish under Nvidia, which customer would prefer
| to buy IP from a potential competitor rather than from a
| neutral provider.
|
| The ecosystem business model that defines Arm simply doesn't
| have any space for them being perceived as biased this way or
| that way.
| tokyojoe wrote:
| Power consumption is a key application requirement for
| mobile. I don't know that GPU's are designed to run on the
| smell of an oil rag which the ARM processor cores do.
| plekter wrote:
| Mobile GPUs (Imagination PowerVR, Qualcomm Adreno, Arm
| Mali, Apple's GPU) are exactly that.
| tw04 wrote:
| >ARM can't flourish under Nvidia, which vendor would prefer
| to buy IP from direct competitor rather than from a neutral
| provider.
|
| I would imagine plenty. Take a look at the list of vendors
| that sell Nvidia GPUs despite the fact that Nvidia sells
| directly into the market.
|
| >The ecosystem business model that defines Arm simply
| doesn't have any space for them being perceived as biased
| this way or that way.
|
| I don't know, Intel's recent announcement that they're
| going to start licensing their IP directly contradicts
| that. I don't think Intel would waste what will likely be a
| fairly large amount of money spinning up a new business
| unit without first doing some market research and ensuring
| there's demand for it.
| smachiz wrote:
| When you're thirsty, you buy from the person selling
| water. I don't think you'll find a lot of love lost
| between the OXMs and nvidia. I'm sure they would love
| more competitors in the space.
|
| We have people licensing Arm and building interesting
| CPUs (Ampere).
|
| I'm not sure that the NVIDIA acquisition would be good
| for the market or for Arm.
| tw04 wrote:
| You haven't explained why Intel is entering the licensing
| business. If vendors have no desire to get their
| licensing from a company that competes in the space,
| there should be no demand for licensing from Intel, all
| of those OXMs should be going to ARM.
| joe_the_user wrote:
| The thing about Nvidia is they have spent a lot of money
| creating a kind of chip+ecosystem situation that is
| unique and superior to all that's out there. And they
| charge a gruesome premium on that and use product and
| license differentiation to extract the maximum in each
| submarket. It's logical and perhaps necessary strategy to
| get a return on their huge investment. But it is just as
| logical that everyone hates them. This is what successful
| investment leading to a unique technology leading to a
| monopoly position looks like.
|
| Intel once was in a similar position to Nvidia and
| everyone hated them then. The failure of their last few
| generation has meant they don't have as strong a monopoly
| position and so have to start taking a more conciliatory
| position with the market. I don't know if they're
| succeeding here but it's obvious they've been "humbled".
|
| Now, maybe Nvidia will treat ARM completely differently
| than it's GPUs. But companies tend to have single
| cultures and so it's easy to imagine Nvidia squeezing
| dimes from other ARM customers, where ARM has been at the
| opposite side of the market, reasonably priced, good-
| enough tech. Charging a high premium on your capital
| investment works for a market leader, that uses the money
| for more investment. But for a market followers, the same
| strategy results in market share shrinking 'till the
| whole thing dies (not that this isn't a way to make money
| but when the thing dies, some people are unhappy).
| robert_foss wrote:
| Nor have we seen any serious uptake of Intels licensing
| business. It's a paper launch.
|
| Adding to that Intel didn't exactly pick this model as
| their first choice. The combination of a wafer production
| shortage and Intels CPUs underperforming is what drove
| Intel to this. It is neither Intels or most feasible
| clients first choice.
| smachiz wrote:
| You haven't demonstrated that anyone /is/ entering into
| contracts with Intel.
|
| Intel has done lots of things that it turns out people
| didn't want to do (with them).
| tw04 wrote:
| They absolutely have people signing up, none of it has
| been publicly announced (that I've seen) but we already
| know they were doing custom designs for
| Facebook/Amazon/MS so they would be logical first-takers.
| smachiz wrote:
| None of those are OXMs and are the end customer. That is
| totally different than what your original assertion was.
| tw04 wrote:
| So tell me what an OXM is? Because Amazon sells outpost,
| an appliance, to end users.
|
| And Annapurna (owned by Amazon) sells CPUs to all sorts
| of vendors, including Ubiquiti and Synology.
| Judgmentality wrote:
| > They absolutely have people signing up, none of it has
| been publicly announced
|
| I can't tell if you're saying you have insider
| information or you're just assuming they're getting
| customers with no evidence.
| Vvector wrote:
| The companies that directly compete with Nvidia (AMD &
| Intel) are not ARM customers. ARM's biggest customers are
| mobile phones, which could benefit from an Nvidia GPU
| robert_foss wrote:
| Couldn't be further from the truth. All Arm SOC
| manufacturers are competitors of Nvidia.
| [deleted]
| tokyojoe wrote:
| ARM is used across a huge array of end market segments.
| Granted, none are as big as mobile, but they're important
| nonetheless. To say that all ARM SoC vendors are
| competitors is therefore not strictly true.
| jorvi wrote:
| Considering how well Apple's M1 is performing, I suspect
| within 10 years the majority of new desktops and laptops
| sold will be ARM-based, with both Intel and AMD having to
| either adapt or languish.
| karteum wrote:
| Difficult to forecast within 10 years... maybe you are
| right, maybe it could be Alibaba/Allwinner/Rockchip with
| RISC-V designs ! :D
| detaro wrote:
| NVidia has embedded product lines, which have a lot more
| competitors. All of which depend on ARM licenses.
| adrian_b wrote:
| Qualcomm is a direct competitor of NVIDIA (e.g. for
| automotive and robotics) and an important ARM customer.
|
| Until now the competing products of NVIDIA and Qualcomm
| differed in NVIDIA having worse CPUs and better GPUs and
| Qualcomm having better (ARM-designed) CPUs and worse
| GPUs.
|
| I do not find it believable that in the future NVIDIA
| would ever provide Qualcomm with better CPUs than those
| of NVIDIA products.
|
| Given NVIDIA's desire of dominating the datacenters, it
| is also hard to believe that they will give to all other
| companies who will attempt to design server CPUs new ARM
| cores at the same time when they will be available for
| the internal NVIDIA design teams.
| tokyojoe wrote:
| This reminds of the analyst who predicted AMD's acquisition
| of ATI would kill off Intel. Nothing of the sort happened.
|
| If a chip supplier like Nvidia buys ARM and uses its
| products, it will ultimately have an outsize say over ARM's
| product (actually IP) roadmaps. That's not going to make
| ARM's current customers happy. Nvidia want to diversify-
| that's why they've targeted ARM. They don't need the
| technology- it's readily available to licence.
|
| Arm is valued at $40 billion on c. $ 2 billion in annual
| sales while Nvidia is valued at > $300 billion on $ 16
| billion in sales. With a valuation of 300 billion, why buy
| ARM and almost certainly damage the ARM business model which
| is as an independent processor IP provider?
|
| And how will Huawei (and China), big ARM licensees, react to
| ARM being owned by a US company given the bad blood in that
| area.
|
| For ARM, it's a strategic disaster IMV. Better to stay
| independent!
| jonplackett wrote:
| Is there anything to stop SoftBank just moving the headquarters
| somewhere else and then selling? Or selling the IP to an
| overseas subsidiary, or some other way big Corps usually ignore
| what governments want them to do?
| vineyardmike wrote:
| No.
|
| Softbank is japanese, NVidia is American, ARM is british.
|
| Also, the UK can probs stop any transfer of ARM
| IP/Company/Etc. if they wanted (idk the laws tho).
| julienb_sea wrote:
| > these companies will simply hollow ARM out (slash R&D, cut
| staff etc) to pump up the target's value, before flogging it
| off or breaking it up
|
| This seems dramatically more likely from a generic investment
| consortium like SoftBank versus an actual chip-focused R&D
| organization like nvidia. I don't see how this is possibly a
| counterargument for sale to nvidia.
| FpUser wrote:
| I think when country allows sale of any company that owns vital
| technology / IP / etc it plays to a detriment of their own
| citizens for the sake of filling owner's pockets. So good for UK
| for trying to protect it disregarding true motives.
| nabla9 wrote:
| ARM deal has a condition:
|
| > 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.
|
| Any one of these 4 regulators can still stop the sale.
| nottorp wrote:
| Oh pretty. I don't see China - which is already under some
| embargos by the US - allowing ARM to become an US company.
| the_duke wrote:
| An interesting side aspect, assuming this is final:
|
| Before the Arm acquisition materialized, Nvidia was quite present
| in the RISC-V space. All current Nvidia cards have at least one
| RISC-V chip on it.
|
| So while their intended high performance use cases are not
| feasible yet, this could lead to Nvidia focusing on RISC-V again
| the medium term, which would definitely be beneficial.
|
| Of course Nvidia can still pursue ARM based designs without
| owning the company.
| [deleted]
| Symmetry wrote:
| I don't think it's a matter of one or the other but rather
| using different ISAs for different things. All the RISC-V use
| by NVidia seems to have been in microcontrollers and all the
| recent ARM use has been in application cores.
| Zenst wrote:
| Times like this I lament what Inmos could of been had the UK not
| just chucked it away as it did.
| samgd wrote:
| Inmos has directly and indirectly led to many British
| companies, including Graphcore:
|
| https://www.economist.com/britain/2011/08/06/how-the-west-wa...
|
| https://www.wired.co.uk/article/graphcore-ai-intelligence-pr...
| adam wrote:
| There's a forecast question on Foretell (a crowd forecasting site
| run by a think tank at Georgetown) about the likelihood of a
| successful acquisition if anyone is interested. Current crowd
| consensus is 41% likelihood, down 2% in the last day:
| https://www.cset-foretell.com/questions/102-will-nvidia-acqu...
| DrBazza wrote:
| Seems a bit like closing the stable door after the horse has
| bolted. This should have happened when Softbank came around.
|
| 'National security grounds' is interesting. It could simply be
| that the UK is no longer part of the EU and this is belatedly
| considered a strategic national asset (i.e. a foot in the game of
| chip design), vs. GCHQ and ARM working together somehow.
| bencollier49 wrote:
| They blatantly ought to have done this for the original sale.
| Better late than never, I suppose.
| jonplackett wrote:
| They were too scared of looking 'closed for business' in the
| middle of the disaster that was/is Brexit.
| thu2111 wrote:
| Brexit only fully happened a few months ago, so it is hardly
| related to this. Any considerations w.r.t. looking 'open for
| business' would certainly still apply. But sure, make
| everything about Brexit, why not.
| SirHound wrote:
| That's true, consequences of actions are only ever felt
| within a very limited timeframe.
| Twirrim wrote:
| Brexit took close to 5 years from vote to implementation,
| during which there was lots of noise from all sides. The
| Softbank deal came after the Brexit vote, once the Sterling
| had dropped sufficiently (~30%) to make it additionally
| enticing.
|
| Among articles from the time,
| https://www.forbes.com/sites/parmyolson/2016/07/18/arm-
| softb..., complete with government spin.
|
| It's hard not to make something about Brexit, when the
| government explicitly chose to make the thing about Brexit.
| The Softbank deal was disastrous for UK tech, and if the
| government really was interested in national security
| grounds (which is what they're claiming this time around),
| it would have intervened in _that_ deal. NVIDIA isn 't
| likely much more of a risk from a national security
| perspective than SoftBank. But it had to sell Brexit, and a
| massive foreign investment in a UK company was an
| opportunity for spin too enticing to give up.
| rcxdude wrote:
| The full legal consequences of brexit have still not fully
| come into force yet (there are various grace periods still
| to elapse: the most recent was the start of this month and
| there is still another extended to 1st October). And the
| secondary effects will likely take years to become
| apparent.
| mhh__ wrote:
| It's the ditch that keeps on giving.
|
| I think we are on transition slogan number 3, quite the
| compensation to being cut off from your customers for many
| businesses I'm sure.
|
| Edit: Is the HN hive telling me Brexit is a good thing then?
| [deleted]
| tokyojoe wrote:
| You might be right here.
| mrweasel wrote:
| I understand objecting, but for security reasons?
|
| A better argument would be that Nvidia gains serious power over
| companies who are currently ARM customer and Nvidia
| competitors.
|
| Perhaps the UK want to be able to use ARM designs for domestic
| chips in the future, without being dependent on an American
| company, but yeah, then they should have objected when a
| Japanese company bought ARM as well.
| ericmay wrote:
| > but for security reasons?
|
| Seems to be the strongest/easiest route to go to justify
| blocking it. The whole national security angle and all.
|
| > then they should have objected when a Japanese company
| bought ARM as well
|
| I have to imagine this was a bit of sleeping at the wheel.
| I'm not sure though.
| dash2 wrote:
| Perhaps more that times have changed. We used to have a
| strong commitment to the neoliberal ideal of a separation
| between state and business. The experience of
| nationalisation had also not been good (think Austen and
| BT). That's changed and we are now in the world of
| "entrepreneurial states" for better or worse.
| ericmay wrote:
| Yea it's a fascinating topic. I think as countries become
| weary of each other (E.U. <-> U.K., China <-> U.S.,
| others...) they start to protect industries and such even
| if it goes in the face of stated ideals. I think we're
| seeing governments act on a more nation-state basis than
| in the recent past. Much more scrutiny and distrust.
|
| Would love to hear your thoughts on the topic.
| tester34 wrote:
| >Seems to be the strongest/easiest route to go to justify
| blocking it. The whole national security angle and all.
|
| What makes you think so?
|
| So Intel - US / TSMC - Taiwan can be considered as national
| security, but ARM not?
| ericmay wrote:
| Could you elaborate? I guess my thinking is similar to if
| someone wanted to try and buy Intel. The U.S. would
| probably stop it on national security grounds.
|
| I hope that makes sense - at least where I was trying to
| go with that comment. Maybe it's incorrect or not well
| thought out but I'd at least like to make my point clear
| :)
| pydry wrote:
| Security objections are a WTO get out of jail free card for
| countries looking to engage in protectionism.
| fauigerzigerk wrote:
| That's true, but I think what the UK government is trying
| to do here is to get guarantees from Nvidia regarding the
| future of ARM operations in the UK.
|
| If Nvidia were to relocate the brainiest parts of ARM to
| the US then the UK would lose a skillset that is arguably
| relevant for national security.
|
| So I don't think this intervention is a definitive no to
| the acquisition. Rather, it appears to be a way of entering
| into negotiations.
| TechBro8615 wrote:
| It's in line with recent behavior toward e.g. Huawei and 5G.
| What's interesting here is that Softbank is a Japanese
| company, but reading the government announcement you'd think
| it may as well be Chinese. It would be interesting to see the
| UK explain to Japan, somewhat of an ally, why its company is
| a national security threat.
| DaiPlusPlus wrote:
| But SoftBank is _selling_ ARM to NVIDIA...
| TechBro8615 wrote:
| Yeah, good point. Can't trust those damn yankees.
|
| It's probably something where the government wanted to
| stop this deal for a number of reasons, and "national
| security" was the easiest justification where they
| already had a legal apparatus in place for doing so.
| nottorp wrote:
| > Yeah, good point. Can't trust those damn yankees.
|
| Trump did a brilliant job :)
| DaiPlusPlus wrote:
| You jest, but the the world is well-aware of the risk -
| and possible consequences - of the top US office being
| compromised - or at least being held by someone who
| doesn't act in NATO's interests - and it's a sobering
| thought.
| nottorp wrote:
| I'm not joking. Every traditional US partner suddenly
| realized during the Trump administration that their
| relation can end without warning. Now they're doing
| damage control.
| the_duke wrote:
| I'm not familiar with the concrete law, but monopoly/market
| based rejections could probably be disputed and result in
| lengthy proceedings. Not so if you swing the national
| security hammer.
|
| Also, as others have noted, it's quite possible that GHCQ has
| backdoors into ARM designs that would be jeopardized.
|
| But despite being owned by Softbank, Arm Ltd. is still
| incorporated in the UK and has their headquarters there. If
| chip design is seen as a essential national capability, the
| national security argument is valid regardless, in my
| opinion.
| trasz wrote:
| Or perhaps doesn't have backdoors, and would prefer it
| stays that way, which could be jeopardized by US owners -
| see the Intel Management Engine.
| throwaway3699 wrote:
| Not only that, but I'd be surprised if the military didn't
| make heavy use of Nvidia cards for ML workloads, CAD design
| or god knows what. I could definitely see a way to frame this
| as a security threat if either company were to stop selling
| to them.
| kelnage wrote:
| Perhaps they've learned from a recent US administration that
| "National Security" is a very broad brush, which is hard to
| contradict, and thus is an easy card to play when you don't
| want to reveal your actual motives! [1]
|
| 1. https://www.bbc.com/news/world-us-canada-53683569
| mytailorisrich wrote:
| The only thing it currently means is that the CMA will
| investigate and prepare a report.
|
| On the face of it the difference with Softbank is that Nvidia
| is a big semiconductors player and thus that this acquisition
| can have a material impact on competition in the industry and
| the UK, which was not the case with Softbank.
|
| In addition, since the UK is now "properly independent" the
| government is probably keen to show it by doing what the US and
| EU competition regulators do.
| cma wrote:
| How are there security reasons when their foreign licencees
| already get complete and modifiable designs? It's only an IP
| protection at that point enforceable through friendly
| relations, not anything immune to adversaries. I can see all
| the anti-competitive concerns though.
| skywal_l wrote:
| But what are the consequences exactly? The deal will be stopped
| and ARM still belongs to a foreign company. Why not follow this
| to its logical conclusion and nationalize ARM if it is so
| important?
|
| You can't prevent someone to sell something if it doesn't want
| to keep it.
| Mindwipe wrote:
| I'm not sure late is better than never in this case.
|
| The horse has literally bolted. Shutting the door now does
| literally nothing other than show you cocked up by not locking
| it in the first place.
| Guthur wrote:
| I'm somewhat surprised by HNs support of this.
|
| I can see a future where Nvidia buys ARM, becomes more hostile to
| licensees, and the door is left open for something like RISC-V to
| gain more market relevance.
| [deleted]
| CivBase wrote:
| I don't know near enough about Nvidia or ARM as organizations to
| justify why I don't like this purchase. I just see two big names
| being consolidated yet again and I don't like it. Even when the
| buyer isn't directly competing with the organization they're
| acquiring, they _could be._
| jack_riminton wrote:
| Does this infer that only a UK based company can buy them from
| now on? How would this affect their share price if they'd go
| public?
| DerDangDerDang wrote:
| No. It just means Nvidia need to give some kickbacks to the
| fantastically corrupt ruling party.
|
| Really hard to see this as anything other than a shakedown
| attempt by people who don't understand that you can't keep an
| ip licensing company inside national borders for long.
| lucian1900 wrote:
| You may be right about the reason. Or maybe it's something to
| do with positioning between US and EU.
|
| The correct move would be to nationalise ARM and build a fab,
| but the Tories are very unlikely to do that.
| verall wrote:
| Because even if it was successful from a national security
| standpoint (semicon independence) it would look like a
| total boondoggle. It would cost billions of government
| money, and then overrun those billions in cost. Chips would
| still be slower than their competitors, and the new British
| fabbed chips would be even slower. No matter which party
| pulled the trigger, the other would ruthlessly tear the
| project down in the eyes of the public as corrupt and
| expensive, terrible for the environment, huge water and
| land usage, etc.
|
| I'm not trying to say that ARM is incompetent, but it takes
| years for an institution to learn how to do this. ARM
| doesn't currently operate fabs.
| xmdx wrote:
| Not necessarily, but only to companies that pose less of a
| security risk than Nvidia.
|
| They said they're going to release material soon to justify
| their decision so we'll have to see what that all means.
| nmstoker wrote:
| Not necessarily. From reading the piece I understand that the
| net effect here is to invoke an investigation by the
| Competition and Markets Authority (ie to ensure there is
| sufficient competition in the market, it does not necessarily
| need to be by UK owned entities)
| toyg wrote:
| Surely that horse bolted when they sold to Softbank. I suspect
| they will try to argue that it has to be someone "outside the
| US" or otherwise protected from monopolistic actors.
| marc__1 wrote:
| Public-traded companies are independent, so no merger or
| consolidation applies. Here is what the U.K. regulatory body
| defines a 'relevant merger' (regardless if U.K. or
| internationally-based):
|
| the creation of a relevant merger situation as defined in
| section 23 of the Enterprise Act 2002 ("the Act"), in that:
|
| (a) two or more enterprises will cease to be distinct;
|
| (b) in the course of the enterprises ceasing to be distinct, a
| person or group of persons will bring a relevant enterprise (as
| defined in section 23A of the Act) under their ownership or
| control; and
|
| (c) the value of the turnover in the United Kingdom of the
| enterprise being taken over exceeds PS1 million.
| chrisseaton wrote:
| I guess governments are suddenly much more interested in keeping
| key industries on-shore.
|
| I believe HMG didn't do anything to stop Astra-Zeneca being sold
| out of the UK a few years ago, and it's just luck it didn't go
| through. They probably see the need now.
| hcho wrote:
| It has to be said the current HMG is radically different than
| the previous one.
| NegativeLatency wrote:
| What does HMG stand for?
| bregma wrote:
| Her Majesty's Government?
| cbzbc wrote:
| Largely in tone only.
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