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FTC sues to block Nvidia's acquisition of ARM
https://www.ftc.gov/news-events/press-releases/2021/12/ftc-sues-block-40-billion-semiconductor-chip-merger
ARM is by far the most widely used CPU architecture in the world. It powers everything from cell phones to cars. These days, if there's a CPU inside and the product isn't a PC, server, or game console, it probably has ARM cores inside. And even if it is one of those types of products, it might still be powered by ARM. Even products such as SSD controllers, FPGAs, or x86 CPUs (!) sometimes have ARM cores inside to do something or other.
So it sent shockwaves through the industry late last year when it was announced that Nvidia was buying ARM. ARM has a well-deserved reputation for being a terrific company to work with. Whatever you want to use ARM cores for, they'll do their utmost to provide you with everything you need for a modest licensing fee.
That is not Nvidia's reputation. Nvidia has a well-deserved reputation for being a terrible business partner. They'll try for vendor lock-in any way that they can get it. And you absolutely do not want to be in a situation where at some future date, you have to buy some unspecified future product from Nvidia at some currently unspecified price. Nvidia will make a good product, but they'll gouge you in every way that you can think of, plus also some creative ones that you can't. From SLI to CUDA to G-Sync and many more, Nvidia has a long list of shenanigans that make the rest of the industry very leery of having their own future business plans rely on being in Nvidia's good graces.
For example, in the last three generations of game consoles, Sony and Microsoft have each had AMD design highly customized chips to power the console. The Nintendo Switch uses an Nvidia chip. There's no reason why Nintendo couldn't have hired Nvidia to make a highly customized chip for them. Well, at least other than Nintendo not having a deathwish. The Switch uses a completely off the shelf Nvidia Tegra chip that had already been designed before Nintendo agreed to buy a bunch of them. Microsoft and Sony trust that AMD will try to do right by them in their console designs, as AMD has in the past. No one trusts that of Nvidia.
So Nvidia is exactly who most of the industry doesn't want to buy ARM. What harm could Nvidia do, you ask? Suppose that you design and build computer chips that use ARM cores for whatever purpose. Suppose that Nvidia makes their own chips that directly compete against yours. Do you think that Nvidia is going to do the best that they can to help your product be as good as possible and arrive to market quickly? ARM would, which is why you're using ARM cores. If you're willing to bet your company that Nvidia will do likewise, that's not likely to end well for you.
The FTC complaint lists three examples of markets where Nvidia already has their own products using ARM cores. If Nvidia buys ARM, they'll surely expand on that list. So even if you're using ARM cores in a market where Nvidia has no competing product just yet, they might well do so soon if the ARM acquisition closes.
Another problem highlighted by the FTC complaint is that vendors that use ARM cores often have to share sensitive information with ARM. If you're a major ARM customer and you want future ARM cores to be designed to your liking, you have to tell ARM what you're planning to do and what you need for it. ARM will make sure that your secrets stay secret and won't share them with your competitors. If Nvidia is your competitor, they can't make the same promise. Being forced to share your future plans years in advance with your rival is not likely to end well.
These problems aren't the sort of thing that can be solved by Nvidia making promises up front, nor by litigation later. If the acquisition goes through and then Nvidia drags their feet on doing what you need, even if you can sue them and win in court, if waiting for litigation delays your product coming to market by a year, you still lose. If Nvidia nominally agrees to do what you want, but intentionally does it badly to cripple you as their competition, what's your recourse?
So why isn't there an industry stampede away from ARM? Because what's the alternative? x86 doesn't have a comparable ecosystem, as neither AMD's semi-custom unit nor Intel's more recent plans to do something analogous and fabricate the chips themselves are anywhere near as developed as what ARM offers. For low power chips, ARM has an extensive portfolio of CPU cores that will burn well under a watt, while x86 has absolutely nothing at all. Beyond that, the options only get bleaker, as MIPS is just about dead, Power is largely relegated to big iron, and RISC-V is still very immature.
In the long run, if the Nvidia acquisition of ARM goes through, there will be considerable industry movement away to some other architecture(s). But even if in ten years, RISC-V has about the ecosystem that ARM does today, that won't do you any good if your company doesn't still exist because in the meantime, Nvidia was able to prevent you from launching any competitive products for several years until your company folded.
If there is to be any government review of acquisitions at all, this is exactly the sort of deal that it's supposed to block. Fortunately, the United States Federal Trade Commission (FTC) seems to see it that way, too. The commission voted unanimously to sue to stop Nvidia from buying ARM. It's also worth noting that this isn't a partisan issue: the commission currently has two Republicans and two Democrats, with three members appointed by Trump (including one of the Democrats) and one by Biden.
Even if the acquisition gets nixed, however, ARM could be seriously wounded. Do you really want to stick with ARM forever even after SoftBank tried to sell the company to Nvidia? How confident are you that they won't try again to sell it to some other company that will cause trouble for you? RISC-V's open nature makes it immune to that sort of problem. The nature of x86 cores being designed by both Intel and AMD (and VIA) makes it so that if one of them won't play ball with you, that doesn't shut you down, but only pushes you to buy from their competitor instead. It will be interesting to see how this shakes out.
ARM is by far the most widely used CPU architecture in the world. It powers everything from cell phones to cars. These days, if there's a CPU inside and the product isn't a PC, server, or game console, it probably has ARM cores inside. And even if it is one of those types of products, it might still be powered by ARM. Even products such as SSD controllers, FPGAs, or x86 CPUs (!) sometimes have ARM cores inside to do something or other.
So it sent shockwaves through the industry late last year when it was announced that Nvidia was buying ARM. ARM has a well-deserved reputation for being a terrific company to work with. Whatever you want to use ARM cores for, they'll do their utmost to provide you with everything you need for a modest licensing fee.
That is not Nvidia's reputation. Nvidia has a well-deserved reputation for being a terrible business partner. They'll try for vendor lock-in any way that they can get it. And you absolutely do not want to be in a situation where at some future date, you have to buy some unspecified future product from Nvidia at some currently unspecified price. Nvidia will make a good product, but they'll gouge you in every way that you can think of, plus also some creative ones that you can't. From SLI to CUDA to G-Sync and many more, Nvidia has a long list of shenanigans that make the rest of the industry very leery of having their own future business plans rely on being in Nvidia's good graces.
For example, in the last three generations of game consoles, Sony and Microsoft have each had AMD design highly customized chips to power the console. The Nintendo Switch uses an Nvidia chip. There's no reason why Nintendo couldn't have hired Nvidia to make a highly customized chip for them. Well, at least other than Nintendo not having a deathwish. The Switch uses a completely off the shelf Nvidia Tegra chip that had already been designed before Nintendo agreed to buy a bunch of them. Microsoft and Sony trust that AMD will try to do right by them in their console designs, as AMD has in the past. No one trusts that of Nvidia.
So Nvidia is exactly who most of the industry doesn't want to buy ARM. What harm could Nvidia do, you ask? Suppose that you design and build computer chips that use ARM cores for whatever purpose. Suppose that Nvidia makes their own chips that directly compete against yours. Do you think that Nvidia is going to do the best that they can to help your product be as good as possible and arrive to market quickly? ARM would, which is why you're using ARM cores. If you're willing to bet your company that Nvidia will do likewise, that's not likely to end well for you.
The FTC complaint lists three examples of markets where Nvidia already has their own products using ARM cores. If Nvidia buys ARM, they'll surely expand on that list. So even if you're using ARM cores in a market where Nvidia has no competing product just yet, they might well do so soon if the ARM acquisition closes.
Another problem highlighted by the FTC complaint is that vendors that use ARM cores often have to share sensitive information with ARM. If you're a major ARM customer and you want future ARM cores to be designed to your liking, you have to tell ARM what you're planning to do and what you need for it. ARM will make sure that your secrets stay secret and won't share them with your competitors. If Nvidia is your competitor, they can't make the same promise. Being forced to share your future plans years in advance with your rival is not likely to end well.
These problems aren't the sort of thing that can be solved by Nvidia making promises up front, nor by litigation later. If the acquisition goes through and then Nvidia drags their feet on doing what you need, even if you can sue them and win in court, if waiting for litigation delays your product coming to market by a year, you still lose. If Nvidia nominally agrees to do what you want, but intentionally does it badly to cripple you as their competition, what's your recourse?
So why isn't there an industry stampede away from ARM? Because what's the alternative? x86 doesn't have a comparable ecosystem, as neither AMD's semi-custom unit nor Intel's more recent plans to do something analogous and fabricate the chips themselves are anywhere near as developed as what ARM offers. For low power chips, ARM has an extensive portfolio of CPU cores that will burn well under a watt, while x86 has absolutely nothing at all. Beyond that, the options only get bleaker, as MIPS is just about dead, Power is largely relegated to big iron, and RISC-V is still very immature.
In the long run, if the Nvidia acquisition of ARM goes through, there will be considerable industry movement away to some other architecture(s). But even if in ten years, RISC-V has about the ecosystem that ARM does today, that won't do you any good if your company doesn't still exist because in the meantime, Nvidia was able to prevent you from launching any competitive products for several years until your company folded.
If there is to be any government review of acquisitions at all, this is exactly the sort of deal that it's supposed to block. Fortunately, the United States Federal Trade Commission (FTC) seems to see it that way, too. The commission voted unanimously to sue to stop Nvidia from buying ARM. It's also worth noting that this isn't a partisan issue: the commission currently has two Republicans and two Democrats, with three members appointed by Trump (including one of the Democrats) and one by Biden.
Even if the acquisition gets nixed, however, ARM could be seriously wounded. Do you really want to stick with ARM forever even after SoftBank tried to sell the company to Nvidia? How confident are you that they won't try again to sell it to some other company that will cause trouble for you? RISC-V's open nature makes it immune to that sort of problem. The nature of x86 cores being designed by both Intel and AMD (and VIA) makes it so that if one of them won't play ball with you, that doesn't shut you down, but only pushes you to buy from their competitor instead. It will be interesting to see how this shakes out.
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Comments
Bloomberg is claiming that Nvidia is abandoning their effort at buying ARM, in recognition that it's not likely to be approved by regulators. The deal was opposed by basically the entire tech industry except for Nvidia and ARM.
Even without buying ARM, Nvidia could get an ARM architecture license and make their own ARM cores if so inclined. What they won't be able to do without buying ARM is to artificially sabotage competitors that rely on ARM cores. And the latter was most of the point of the acquisition.
The big remaining question is what happens to ARM. If their customers still expect ARM to be sold to someone who will try to crush them, then that could motivate them to try to move away from ARM if they can. The article says that ARM is planning on an IPO, that is, becoming a publicly traded company.
The processor in the Shield devices.
Respect, walk
Are you talkin' to me? Are you talkin' to me?
- PANTERA at HELLFEST 2023
It's officially dead now.
------------
2024: 47 years on the Net.
Nvidia wanting control of ARM isn't because that would allow them to make the government to do things for them, unless you're calling for an end to government protections of intellectual property. It's because they could selectively cripple competitors when they want to take over one market or another.
The role of governments in protecting intellectual property isn't some novel fad. It's in the US Constitution as written in 1787:
"The Congress shall have Power... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries" (Article I, Section 8)
So long as ARM's business is one of licensing out their architecture and cores and that's the main way that they make money, their incentives are to make the best possible architecture and cores that they can. That's exactly what you want if you're trying to license ARM cores to use them for something.
But suppose instead that you license ARM cores for use in some particular market. And then suppose that ARM gets bought by one of your competitors in your main market, and selling ARM core licenses is only a minor part of that company's revenue. What stops them from crippling the ARM cores that they'll sell you as a way to weaken their competition and make their own product relatively stronger as a result? That's not just a risk of Nvidia owning ARM, but also a risk if ARM were owned by Intel, AMD, Apple, Qualcomm, Samsung, or a number of other companies.
You can license AMD's CPU cores for various purposes in their semi-custom unit, and Intel is pushing toward offering their own CPU cores available for license, too. But they won't necessarily license their cores to you on favorable terms to do whatever you want, as they don't want you to create a competing product in their own major markets. Thus, AMD has licensed out their CPU cores for a number of game consoles, but not for socketed desktop or laptop parts that would directly compete with their Ryzen line. ARM doesn't have any such markets of their own outside of the licensing business, so they will license their cores for you to do whatever you want with them.
Logic, my dear, merely enables one to be wrong with great authority.
Anyone trying to compete would
-Be boycotted to hell as the cartel members would demand that their suppliers and retailers refuse business with any competitor
-Face predatory pricing if the rich cartel can drive them out of market that way
-Be bought and shut down to eliminate competition
https://biturl.top/rU7bY3
Beyond the shadows there's always light
Logic, my dear, merely enables one to be wrong with great authority.
https://biturl.top/rU7bY3
Beyond the shadows there's always light
Logic, my dear, merely enables one to be wrong with great authority.
1) The crazy experiments that society runs will be the ones that a lot of people actually want to see, not just some idiot dictator,
2) The crazy experiment will be selectively run in places where the people want to see it, and mostly not in places where everyone thinks it's crazy, and
3) The system is self-correcting so that society will change course if a crazy experiment has catastrophic results. In most cases, you don't even have to wait for the next election, as politicians will release that they'd better change course before then to avoid getting crushed in a landslide.
For a recent example that wasn't on anyone's radar a decade ago, see "defund the police".
You can't slow policing to the point crime increases and still not allow law abiding citizens the ability to defend themselves. That's designed chaos.
A once great public education system once taught the difference between laissez-faire capitalism vs a capitalism with some government consequences (e.g. a thousand years ago, scamming on weight scales... more recently... read about the barrons of the industrial revolution in the US).
However, on topic... Nvidia (which I buy GPUs from)... this is worth another look for this transaction.
FYI- Intel could have smashed AMD into dust 15 years ago (or bought them for pennies on the dollar )... instead it's an oligarchy (because if Intel did that it was a monopoly, they would be under anti-trust regulations).
FYI - Microsoft acquisition Activism/Blizzard is not a monopoly reasonably, as I posted elsewhere... case by case basis.
In all seriousness (and yes I have a Down Syndrome adult family member who is awesome... and wouldn't give a crap about the R word.. because people use it interchangeablely for many things)...
I don't sniff my own educational and 20+ work experience farts towards others as awesomeness.
So, just read/watch history (not Wikipedia... one of the own site founders has said many times it's edited by bad faith actors).
Everything you read and learn, challenge if something nags at you as "off".
I love history and cultures... and put in context for their respective day and age (not retroactive standards of 2022)... yes, even in those cultural ethos... there is so much tragedy, but some greatness too..