Looks like Nvidia is giving up on the British chip design arm’s $40 billion purchase

Nvidia Tegra
Image: Nvidia

Update [Tue 25th Jan, 2022 14:15 GMT]: Bloomberg is reporting that Nvidia is about to drop its offer to buy British chip designer Arm for $40 billion from SoftBank. The move was revealed in September 2020.

Nvidia – the company that makes the chips that power the Switch, Switch Lite and Switch OLED – has clearly told its partners that it doesn’t expect the deal to be conclusive. Meanwhile, SoftBank is gearing up for Arm’s initial public offering (IPO).

Speaking to Bloomberg, an Nvidia spokesperson said that the company still thinks the acquisition “provides an opportunity to accelerate Arm, driving competition and innovation.”

Arm and SoftBank have yet to comment on the report, but there were doubts at the time the deal was announced that it would pass North American, UK and EU regulators, with concerns fear that such merger will adversely affect competition.

Original story [Mon 14th Sep, 2020 09:30 BST]: Arm – the British semiconductor design company behind the mobile technology found in millions of devices worldwide through companies like Apple, Microsoft and Qualcomm – is being acquired by Nvidia from SoftBank’s SoftBank. Japan with a huge value of 40 billion USD.

At first, at least, it looks like Nvidia wants to keep things as they are, and Arm will continue to be based in the UK – Nvidia has even pledged funding to set up an AI research center at Arm’s HQ , suggesting that the deal is more about the future of AI than it is about leveraging Arm’s tech network. Nvidia has also stated that it intends to create giant Arm-based data centers for cloud computing and other uses.

In the long run, however, it’s not unreasonable to view the acquisition as Nvidia’s way into the CPU space, an area it previously struggled with. The company’s main business is making GPUs, and outside of the Tegra “system on chip” line – used in the Nintendo Switch – the company is more interested in AI and in-car technology.

The Tegra chips were originally designed with smartphones and MP3 players in mind like the ill-fated Microsoft Zune, but Nvidia found it difficult to make strides in a smartphone arena dominated by Snapdragon chipsets. on Qualcomm’s Arm, and instead focused on putting silicon in the tablet and itself. -homemade devices, like Nvidia Shield line – the creation is said to have helped catch Nintendo’s eye when it comes to the technology it wants to use inside the Switch.

Arm’s business model is based on licensing its IP to other companies to manufacture, rather than making its own chips. That means that once the deal goes through, Nvidia (through Arm) will receive royalties on every Arm chipset manufactured in the world.

For Arm, it’s another sign of how successful the business – founded in 1990 on Acorn Computers’ Archimedes home computer – has become in recent years. . The Arm chip is used in most smartphones today and has previously been found in the Game Boy Advance, Nintendo DS, 3DS, and Switch (Nvidia’s “System on Chip” Tegra uses Arm silicon as its CPU. it). Apple recently decided to use Arm chips in its future MacBooks, and Microsoft is also working on a version of Windows and Surface OS that will run on Arm. That might explain why Nvidia paid $10 billion more than the $30 billion SoftBank bought the company in 2016 — at a time when Nvidia was worth about the same. Today, Nvidia is worth $300 billion.

So how does this benefit Nintendo? Nvidia and Arm are currently under the same roof (so to speak) will only make the former’s position in the market more secure; now it will have a large degree of influence on the world’s most popular mobile CPU technology (although it has been announced that Nvidia intends to keep Arm “neutral”, so it will not achieve any single advantage, at least to begin with), and that could bode well when it comes to Nintendo’s place in the gaming hardware market over the next decade – assuming they decide, of course. stick with Nvidia’s Tegra chip.

Arm’s success will now directly benefit Nvidia, which will only strengthen the company’s position in the mobile chipset market. Nvidia is already a world leader in GPU technology (an area where Arm is also involved, through its Mali chipset), so getting more involved in mobile CPU products beats the world. of Arm could lead to some particularly interesting developments in mobile computing – developments that could shape the future of the Switch franchise. Looks like Nvidia is giving up on the British chip design arm’s $40 billion purchase

James Brien

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