Jensen Huang's defence of the Nvidia-ARM deal

September 15, 2020 // By Peter Clarke
Jensen Huang's defence of the Nvidia-ARM deal
Jensen Huang, CEO of Nvidia, and Simon Segars, CEO of ARM, spent a great deal of Monday September 14 on conference calls arranged to suit various time zones explaining the proposed merger of their two companies.

The deal is set to produce a major force in fabless semiconductors targeting artificial intelligence but has been attacked by observers for threatening the independence of IP provider ARM and potentially impairing its business (see ARM sale to Nvidia agreed at $40 billion and Opinion: Nvidia's bad deal is not yet done). By Nvidia's own estimation the deal could take as much as 18 months to clear regulatory hurdles that could be thrown in its path.

The conference calls painted a picture of a combined Nvidia-ARM that would be a 30-year champion for the era of artificial intelligence. It also emphasized that ARM would continue to license technology out using an open business model. Indeed, Huang frequently said that one purpose of the deal was to give Nvidia's GPU and AI technology access to customers via the IP licensing business model.

First line of defence

Most analysts bowled the fairly straight ball at Huang that if the deal went through, Nvidia would be competing with its customers; that this could be bad for Nvidia's chip sales and for ARM's IP licensing.

Huang's first line of defence was that as it stands ARM and Nvidia barely compete with each other and so IP licensing would continue in an open and neutral manner. In 2019 Nvidia shipped 100 million chips mainly into the data center while ARM technology shipped in 22 billion chips across all embedded fields, he said. "We're [Nvidia is] in very few mobile communications. We're in very few embedded applications." He added: "We love the business model. It will stay open and fair and we'll offer even more IP," said Huang.

So, Huang's position appears to be that it is good to use different delivery mechanisms for different application sectors.

Next; Conflict of interest

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