Graphics industry analyst Dr. Jon Peddie speculates about the UK tech giant’s future amid growing rumors of a Softbank sale.
In an August 3 Jon Peddie Research article, leading computer graphics industry analyst and market researcher, Dr. Jon Peddie, posed a big “What if?” regarding Nvidia’s growing courtship of UK tech giant Arm amidst growing rumors of a potential deal between the two…
“What if Intel jumped in and snatched it away from Nvidia, just as Nvidia grabbed Mellanox out of Intel’s hands?”
According to Peddie, Nvidia is headed toward more vertical integration in its overall business profile, and the hypothetical acquisition would put the company in a position to control its own destiny. “Arm has the resources to build high value-add edge and local servers and Nvidia has a big stake in the HPC market,” he states. “Nvidia has signed a deal with Mercedes which is a top to bottom deal. Arm fits in that master plan from the server-side for AI training, to the tech needed in the car for autonomous driving and nice dashboards.”
He goes on to say, “Arm is definitely up for sale. Softbank paid way too much for it and now with the stock market at a hot point, it would be the perfect time to unload it,” before postulating about Intel, in essence, using it’s financial brawn to step in and snag the deal from Nvidia. “Intel would enjoy giving Nvidia its comeuppance, but it would also really like to thwart Nvidia’s drive into what Intel had thought was their domicile, the data center,” he says. “Intel could also argue to the various governments that Intel already plays the role of Switzerland and shows no favor to any OEM or system builder, and so adding another processor to its stable, as it has been doing with its collection of AI processors, and its alleged GPU, is no big deal.”
Softbank would love such a deal, he continues, “because it adds billions to the sale price,” and with Intel’s much deeper pockets, “a bidding war is not one Nvidia can win.”
In a slightly different take on the situation, Arm co-founder and former president Tudor Brown suggests that a sale to Nvidia is far from a foregone conclusion. In an NS Tech article published today, Brown laments the potential $32 billion purchase, noting that it would fundamentally clash with Arm’s underlying business model, and that since it sells or licenses technology to a large number of companies, they need to remain in good terms with “an unholy clan of competitors.”
He goes on to say that an Arm purchase by Nvidia, or any other semiconductor maker, is “immediately going to upset that balance and make it very, very difficult for other companies to feel that they have equal access to the technology.”
The NS Tech article goes on to state there is widespread disgruntlement that both the original Arm sale to Softbank, as well as the potential Nvidia deal, represent failures on the part of the UK government, and that while probably too late, the government should help keep vital technology in the country by helping Arm go public instead.
Peddie told AWN, “The M&E space is one of the heaviest users of servers and communications equipment, as well as mass storage devices. The communications and storage systems are big users of Arm processors, and a new class of low-power-consuming servers based on Arm are rapidly entering the datacenter. Intel and AMD have tried to counter this with new low power processors, but they can’t match the efficiency of a RISC-based Arm design. If Intel were to pick up Arm it would have an insured future in the M&E space as a trusted supplier across a broad spectrum of components.”
Who else could bid for Arm? Peddie notes that AMD is flying high at the moment and may be a logical choice, “but financially, they just aren’t in that class.” Qualcomm and Samsung have the financial brawn, he adds, as does Sony.
What will happen next? “Playing poker with a multi-billion pot,” Peddie concludes. “How freaking exciting is that?”
Dan Sarto is Publisher and Editor-in-Chief of Animation World Network.