Jensen Huang's defence of the Nvidia-ARM deal: Page 2 of 4

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.

But Nvidia's adoption of the IP licensing model while also selling chips does not fundamentally address the objection of conflict of interest. It just adds Nvidia GPUs and AI cores to the conflict. One analyst picked up on that and used his question to probe further.

Huang's second line of defence was to say that Nvidia welcomes competition throughout the data center platform from chip to software. He said Nvidia sells chips, boards and software in any combination. Some customers take the chips and make their own boards or write their own software. Others take the software and make their own chips. Some take the platform.

In effect, Huang said Nvidia already competes with its customers everywhere from chip to board to software. Adding ARM will merely add competition at the IP level and is nothing to be perturbed about. "We will stay neutral. We are committed to the open business model for boards, chips and throughout the software stack," Huang said.

However, Huang did not say that ARM would be operated as wholly-owned subsidiary with its own board of directors, one thing that might have deflected some of the criticism over competing with customers. Instead he said ARM would operate as a business unit based in Cambridge. This might seem like a minor distinction but it indicates a direction of travel, towards merged engineering resources.

Three reasons

Huang said there are three reasons why Nvidia wants to buy ARM as soon as possible:

1) To license Nvidia's IP through the ARM ecosystem

2) To create a first-class data center computing platform based on the ARM architecture

3) To invent the future of cloud-to-edge computing

Segars appeared keener on the second two of the three points. "I truly believe AI is the defining technology of the future. We are just at the starting point. [The deal will provide] so much more weight and resource. We will also have more to go and sell, which is nice."

Segars also admitted he had spent some time speaking with customers about the deal but did not characterise their attitude as either opposition or acceptance. "Independence is part of our strength." He said the combination with Nvidia will bring more investment but with the intent to maintain the independent business model.

Next: Promise or time-bound legal commitment

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