Technology 15th September, 2020 YouTube

Nvidia to acquire ARM for 40 billion USD! What do I think ๐Ÿค” ? Good ๐Ÿ˜Ž : Bad ๐Ÿ˜Ÿ

This deal represents a major shift of balance in the technology sector in general. But, it will especially affect the mobile computing market as we know it today.

A big news dropped in technology sector. On September 14th, 2020 - Nvidia sent out tweet stating that it is going to acquire ARM for 40 billion USD! Well, this raises a lot of question in technology sector. For those who do not know about these two tech giants let me give you all a brief.

NVIDIA to Acquire Arm for $40 Billion, Creating Worldโ€™s Premier Computing Company for the Age of AI.

Nvidia is an American tech company, leader in producing GPU related products. Mostly, their products are used in gaming, film & animation companies. But, in recent years they have gained a lot of ground in AI and mobile computing markets. Some experts even suggests that Nvidia is now leader in AI innovation with 80% market share. Let that sink in.

And on the other hand, ARM is world leader in semiconductor IP (or intellectual property) company. With almost 70% of world population uses it's architecture. All most all chinese smart phones uses ARM architecture based processors in their mobiles. So if you have any android device that probably has ARM inside. Even Apple is using ARM for making it's processors for now. But they are already building their own chip (by the name) 'Silicon'. So Apple is the safe zone. FOR NOW!

So why do I think this deal is happening now? There might be atleast two reasons for it.
- Number one, Softbank which hold most of the shares in ARM is selling their stakes to Nvidia because it has been a bad couple of years for them. COVID just made the situation even worse. Most of Softbank investment was made in ride sharing companies like UBER, is going bad this year. And, last year WeWork was total flop show.
- Number two, US government wants to raise there stake in tech market. And at the same time it is a reply towards chinese push to gain upper hand in technology sector.

Well played Jensen, well played indeed (clap sound effect)

Jen-Hsun Huang
Jen-Hsun Huang, Co-founder, president and CEO, Nvidia Corporation

So, what can China do? Well, first this move is not finished yet. Nvidia and ARM need to clear this deal with US, UK, Japanese and Chinese government. And, I think chinese government would be less interested in that unless they get something in return.

Second, RISC-V is an open source IP started at University of California. Most experts see it as next ARM. Most importantly, Alibaba and Huawei are members of RISC-V. If this moves get completed, RISC-V most likely profit from it in a major way.

So, what does it all mean for the end user. Well, Gamers, film makers and animators can get their hands on cheaper and better GPUs. More competitors will merge in mobile computing market which will benefit end customers. So, doest that mean mobiles will be cheaper in future. I do not think so. but, what can happen is Nvidia starts making processors with high graphical performance for mobiles. Maybe ray tracing coming to mobile games. That will be interesting.

Then who is going to lose in this deal. I think AMD, Intel and maybe Qualcomm. AMD recently started producing good processor for desktop and compete with Intel. But they were also trying to compete with Nvidia in GPU market. Well with recent RTX 3000 GPU launch many see this deal as major setback for AMD's push. While Intel ambition of in mobile computing will now see one more major competition. On the other, qualcomm which also uses ARM architecture, will now face real danger of their monopoly in the mobile computing space. A competition that can fight back harder than they would like to.

So what conclusions can we make for this. Personally I think this deal has both upside and downside. Upside, more computing and graphical power in your handheld devices. Downside, Nvidia will now likely start another monopoly in mobile computing and mobile gaming market.