The UK Government has decided to intervene in NVIDIA's proposed acquisition of ARM

[Delicieuxz]

 

UK Government Intervenes in NVIDIA Acquisition of ARM

Quote

The UK government said today that it was intervening in the proposed sale of ARM to chipmaker NVIDIA on national security grounds.

 

“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 UK agency announced. “[Today,] the Secretary of State issued a public interest intervention notice (PIIN), confirming that he is intervening in the sale on national security grounds. In reaching this decision, he considered advice received from officials across the investment security community.”
...
The intervention could postpone the sale by at least several months. For now, the government is waiting on a report about the implications of the transaction from its competition authority, which is due by the end of July. At that point, the government will make further decisions with regard to the sale.

 

UK government notice - Proposed acquisition of ARM Limited by NVIDIA Corporation: public interest intervention

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On 19 April 2021, the Secretary of State issued a public interest intervention notice (PIIN), confirming that he is intervening in the sale on national security grounds. In reaching this decision, he considered advice received from officials across the investment security community.

 

The Competition and Markets Authority (CMA) will prepare a report on the competition and national security aspects of the proposed transaction. The CMA has until midnight on 30 July 2021 to complete and submit this report to the Secretary of State.

 

The Thurrott article says the intervention could delay Nvidia's acquisition by "at least several months". But I presume that the UK government could also block the sale entirely.

 

While I think that Nvidia might do some cool stuff if they gained ARM, I also don't like the prospect of Nvidia using the company for anti-competitive purposes. And I don't like the idea of more technology juggernauts being concentrated in the US, making other countries dependent specifically on the US (which would be something the US could abuse in geopolitics), and giving US spy agencies more opportunities to exploit relationships with tech companies that could lead to hidden security compromises in hardware that's used around the world.

[dalekphalm]

Personally I'm not in favour of NVIDIA buying ARM. I think there's too big of a risk that NVIDIA will eventually shut down the competitive open nature of ARM and switch it to being an internal NVIDIA product not accessible to third parties.

 

There's also the concern that it'll give them an unfair competitive advantage against the other companies currently basing their SOC's off of ARM, even if they continue to allow those companies access to the IP.

[Taf the Ghost]

Nvidia buying ARM is actually bad for everyone. But the real issues, for everyone involved, is ARM is UK tech, Nvidia is US tech and ARM has a big presence in China. Yay, geopolitics! 

[Mr.Meerkat]

4 minutes ago, Taf the Ghost said:

Nvidia buying ARM is actually bad for everyone. But the real issues, for everyone involved, is ARM is UK tech, Nvidia is US tech and ARM has a big presence in China. Yay, geopolitics! 

Actually three parties benefits from it: 

1. Nvidia as they're getting the IPs, experience, tech ect.

2. Softbank as not only do they get $40 billion to re-invest in other projects/firms but also,10% Nvidia stock, making them the largest shareholder (currently largest is around 7.5%). 

3. US gov for obvious reasons. 

 

As a whole, I'd prefer for Nvidia to either be owned by another UK company or become their own entity with no parent company again but I don't think that'll happen. I guess we can only wait and see what happens.

[dalekphalm]

2 minutes ago, Mr.Meerkat said:

Actually three parties benefits from it: 

1. Nvidia as they're getting the IPs, experience, tech ect.

2. Softbank as not only do they get $40 billion to re-invest in other projects/firms but also,10% Nvidia stock, making them the largest shareholder (currently largest is around 7.5%). 

3. US gov for obvious reasons. 

True enough.

2 minutes ago, Mr.Meerkat said:

As a whole, I'd prefer for Nvidia to either be owned by another UK company or become their own entity with no parent company again but I don't think that'll happen. I guess we can only wait and see what happens.

I assume you mean "ARM" and not "NVIDIA" here? NVIDIA has no parent company.

[StDragon]

I don't understand. Softbank acquired Arm in 2016; which BTW is a Japanese conglomerate. Why didn't the UK object then? Secondly, how can they now if it belongs to Softbank?

[Taf the Ghost]

Just now, StDragon said:

I don't understand. Softbank acquired Arm in 2016; which BTW is a Japanese conglomerate. Why didn't the UK object then? Secondly, how can they now if it belongs to Softbank?

Because they bailed them out, lol. 

[mark_cameron]

1 hour ago, Delicieuxz said:

 

UK Government Intervenes in NVIDIA Acquisition of ARM

 

UK government notice - Proposed acquisition of ARM Limited by NVIDIA Corporation: public interest intervention

 

The Thurrott article says the intervention could delay Nvidia's acquisition by "at least several months". But I presume that the UK government could also block the sale entirely.

 

While I think that Nvidia might do some cool stuff if they gained ARM, I also don't like the prospect of Nvidia using the company for anti-competitive purposes. And I don't like the idea of more technology juggernauts being concentrated in the US, making other countries dependent specifically on the US (which would be something the US could abuse in geopolitics), and giving US spy agencies more opportunities to exploit relationships with tech companies that could lead to hidden security compromises in hardware that's used around the world.

Interventions like this are rare.

 

They usually proceed if there are genuine grounds for concern and the UK Government has legitimate concerns. The CMA report just gives additional evidence really.

 

The principle objection seems to be on national security grounds not "competition" per se.

[mark_cameron]

3 minutes ago, StDragon said:

I don't understand. Softbank acquired Arm in 2016; which BTW is a Japanese conglomerate. Why didn't the UK object then? Secondly, how can they now if it belongs to Softbank?

Because there seems to be concern in the UK that Nvidia will move the entire operation and ARM IP out of the UK.

 

Softbank were looking to invest.

 

Nvidia may be cherry picking the technologies.

[mark_cameron]

https://www.businessweekly.co.uk/news/hi-tech/tech-trekkies-arm-chips-boost-space-exploration

 

Quote

• 9 March, 2020 - 09:40 By Tony Quested

Tech Trekkies: Arm chips to boost space exploration

Cambridge superchip architect Arm is already on a different planet after shipping more than 160 billion chips – over 20 times Earth’s population. Now the tech Trekkies are shooting at fresh frontiers to the stars and beyond with ultra durable chips for use in space.

Arm believes its research into chip radiation hardening and resiliency may temper the potentially dangerous effects of solar radiation on space electronics.

While space corrosion of electronics has yet to trigger an inter-galactic disaster, Arm feels it might only be a matter of time before catastrophe strikes a mission.

Rob Aitken, Fellow & Director of Technology of Arm, says earth-grade electronics don’t fare well in space. 

“They’re regularly exposed to a barrage of disruptive forces: solar winds, extreme temperature fluctuation, cosmic radiation and Van Allen radiation belts,” he says.

“The results of these radiation effects can be temporary, leading to a few incorrect calculations as a computer chip’s internal bits are flipped. However, total ionizing dose and single event latch-ups can spell total destruction for unprotected hardware.

“While non-destructive effects can amount to recoverable hiccups during routine tasks like playing a video or maintaining basic communication channels, the stakes become far higher when a computer is responsible for gathering data. In these situations, some or all of the data may become corrupted, making it difficult to determine whether or not it can be used. In extreme environments, reliability is king.”

Illustration. UK is currently seeking to expand its own space programmes with a launch facility in Scotland.

 

They're not going to want to see domestic chip design and technology moved elsewhere on "national security grounds"

[Bombastinator]

Been expecting this.  I’ve always had an “it’ll never fly Orville” attitude about this particular transfer.

[Kisai]

1 hour ago, StDragon said:

I don't understand. Softbank acquired Arm in 2016; which BTW is a Japanese conglomerate. Why didn't the UK object then? Secondly, how can they now if it belongs to Softbank?

Probably because Softbank isn't a vertically integrated business. It's more like Berkshire Hathaway. Things they acquire just continue to operate as usual. Softbank itself also isn't a typical keiretsu either. Like in context all other keiretsu's in Japan own a bank, insurance, trading, manufacturing (eg car brands you might recognize) and a shipping company and are all intertied through the bank.

 

Nvidia however is a vertically integrated business which puts them into the same position as AMD and Intel, but also the hated telecom networks in north america. Nvidia has more in common with Comcast and AT&T than it does with Softbank.

 

If you need examples of what would happen:

- Proprietary Linux drivers, old hardware not supported on Linux and mobile platforms after 10 years

- Extinguishing of competing hardware acquired (3dfx, MediaQ)

- Large Acquisitions just disappear , notice how the website for mellanox just disappeared into the nvidia website. Though at this point it's all still branded mellanox. https://www.delltechnologies.com/en-us/blog/accelerating-dell-technologies-supercomputing-with-new-infiniband-interconnects/

 

So while it's no loss for nvidia to acquire Mellanox, as other companies (including Intel) make that HPC networking equipment, the companies they've acquired just disappear into the brand, and access to that technology is often locked behind proprietary drivers and libraries, which means good luck maintaining any system using that hardware.

 

It would be different if ARM decided to open source all their existing chip IP blocks at the point of merger so that all existing technology using ARM would continue to have a path forward should nvidia decide to keep all innovations to itself, but that likely wouldn't happen. 

 

Regardless if it's in the UK's interest to prevent Americans from acquiring and consolidating tech, most mergers, even ones that are clearly bad for the country, often complete because platitudes of "we will open new business units HQ's in the (former merged company's city) to keep the jobs" but then will just shut all that down once the regulation window disappears. That has happened, every, single, time with big tech mergers. Especially any merger involving telecoms or manufacturing.

 

[Zodiark1593]

3 hours ago, dalekphalm said:

Personally I'm not in favour of NVIDIA buying ARM. I think there's too big of a risk that NVIDIA will eventually shut down the competitive open nature of ARM and switch it to being an internal NVIDIA product not accessible to third parties.

 

There's also the concern that it'll give them an unfair competitive advantage against the other companies currently basing their SOC's off of ARM, even if they continue to allow those companies access to the IP.

I’m in agreement. I oppose the sale of ARM to Nvidia. 
 

If ARM isn’t viable alone, a third party with little attachment to the tech sector would be best so long as some neutrality is maintained. 

[Arika]

There is no good buyer for ARM.

 

ARM is loosing money fast, they have been for years. the only Companies with the liquid cash to be able to sustain it long enough to even have a chance at it being profitable, are the kind of Companies you DON'T want to buy it.

 

At this point it's going to come down to the lesser of n evils.

[whm1974]

2 hours ago, Arika S said:

There is no good buyer for ARM.

 

ARM is loosing money fast, they have been for years. the only Companies with the liquid cash to be able to sustain it long enough to even have a chance at it being profitable, are the kind of Companies you DON'T want to buy it.

 

At this point it's going to come down to the lesser of n evils.

ARM is losing Money? Doesn't the Company earn royalties for both it's ISA and Cores? A very wide range of Devices use ARM SOCs, so shouldn't ARM, Holdings have a constant flow of Cash flowing in? 

[Kisai]

2 hours ago, whm1974 said:

ARM is losing Money? Doesn't the Company earn royalties for both it's ISA and Cores? A very wide range of Devices use ARM SOCs, so shouldn't ARM, Holdings have a constant flow of Cash flowing in? 

Nope.

 

https://www.eejournal.com/article/arm-saturation-price-hikes-and-possible-spinoff

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It’s no secret that ARM is the 500-lb. gorilla in the IP-licensing business, but there are new signs that the company may be reaching its peak. Licensing revenue is down slightly, the company is reportedly raising prices to compensate, a Chinese joint venture has gone badly, and its corporate owner, SoftBank, may be preparing to sell off the entire company. 

 

Meanwhile, things aren’t all bleak. Apple recently announced that it is switching from Intel to ARM processors for its desktop and laptop computers, the world’s fastest supercomputer is based on ARM for the first time ever, and ARM still dominates the market for 32-bit processors worldwide, with billions of units made and sold every year. 

 

But dominance isn’t the same as growth. You can only expand for so long before gravity and inertia take their toll and the arc bends downwards. At some point, you’ve licensed everybody on the planet and exacted as much tribute from them as you can, stalling any further expansion. And ARM may have reached that point. 

 

Like, they can't retroactively charge more. Once you've licensed an IP block, you can't take it back.

 

Now the there are two alternatives:

a) IPO, with no voting stock (all preferred shares), common stock (voting shares) are issued only to employees and must be sold back to the company if they leave the company. This is what companies like Berkshire Hathaway have, where the voting stock and the non-voting stock have different voting differentials, and thus prevents any hostile take-overs by buying your way onto the board.

b) Sell to or become a private company that operates as an IP holding company only and only licenses technology. Even if the company shrinks in bad years.

 

A third option, that I do not see happening is ARM producing their own socketed SoC's that have feature parity with Apple's M1, for the express purpose of Windows/Linux AARCH64. The big gotcha here, is that this would be easier done by NVIDIA owning ARM than ARM trying to license GPU patents from anyone.

 

 

 

 

[Zodiark1593]

As large a customer as Apple is, one has to keep in mind that Apple doesn’t license ARM’s IP blocks. They only license the ISA, and develop their own cores on that. Apple isn’t licensing any of ARM’s more lucrative, high performance products, they bypass that entirely. It’s likely that Apple contributes quite a bit less to ARM than expected as a result. 

[Bombastinator]

16 hours ago, Arika S said:

There is no good buyer for ARM.

 

ARM is loosing money fast, they have been for years. the only Companies with the liquid cash to be able to sustain it long enough to even have a chance at it being profitable, are the kind of Companies you DON'T want to buy it.

 

At this point it's going to come down to the lesser of n evils.

ARM is STILL losing money? I thought they were one of softbank’s most profitable holdings.  The only reason they’re selling it is because they also owned some office space stuff that did NOT do well in the pandemic.

Edited April 20, 2021 by Bombastinator

[Random_Person1234]

6 minutes ago, Bombastinator said:

AMD is STILL losing money? I thought they were one of softbank’s most profitable holdings.  The only reason they’re selling it is because they also owned some office space stuff that did NOT do well in the pandemic.

ARM*

[Bombastinator]

3 minutes ago, Random_Person1234 said:

ARM*

Most correct.  Ihateautocorrect. My autocorrect tuns “and” into AMD too, which is exceptionally irritating.  Fixed.  Thankyou.

[pas008]

i'm all for nvidia getting arm as long as they keep their open license promise (at least for 7yrs)

 

price increases are inevitable, everything has skyrocketed metal, wood, food, etc

 

[Bombastinator]

5 minutes ago, pas008 said:

i'm all for nvidia getting arm as long as they keep their open license promise (at least for 7yrs)

 

price increases are inevitable, everything has skyrocketed metal, wood, food, etc

 

Wood looks to be coming down again shortly.  Apparently lumber mills are full to the rafters with inventory.  I suspect an unsustainable situation.

[StDragon]

48 minutes ago, Bombastinator said:

Wood looks to be coming down again shortly.  Apparently lumber mills are full to the rafters with inventory.  I suspect an unsustainable situation.

OT, but the bottleneck is the mills themselves. Because many where shutdown in the US, both the tree farmers and consumers are hurting. The remaining mills in production? They're laughing all the way to the bank.

[avg123]

ARM provides 2 things: the instruction set and the architecture design right?

apple already dont use the architecture design provided by ARM, they make their own custom cores?

So if nvidia stops open nature of ARM, can apple just move away from the ISA and make their own ISA? it would break compatibility but does apple care?

[avg123]

i would rather have nvidia acquire it now than some chinese firm down the line