Arm fears it cannot grow without Nvidia. To do so, the company on its own would have neither the expertise nor the resources.
If the Nvidia acquisition does not go through, Arm will face significant obstacles. The company fears it will not be able to grow without Nvidia’s capital. This is according to an extensive statement from Arm and Nvidia in response to the UK antitrust regulator’s decision to further investigate the acquisition.
Nvidia wants to buy Arm but that deal is meeting a lot of resistance. Arm is currently an independent party that sells licenses for the ARM architecture and processor designs to numerous players worldwide. Those fear the acquisition will erode Nvidia’s independence. Arm customers are even Nvidia competitors in some cases. The fear is further that Nvidia will use Arm primarily to strengthen its own position in the market at the expense of others.
No competitiveness without Nvidia
Nvidia and Arm contradict that. Arm now states in a statement that it is not in a position to grow without Nvidia. In the phone market, Arm designs are doing well but without outside help, the company says it cannot break into the data center and PC market. There, Intel and AMD are too entrenched with their x86 architectures. Arm would lack the expertise and capital to compete with the incumbents.
read also
Arm fears poor competitiveness without Nvidia acquisition
Moreover, the perception of Arm as a success story is no longer accurate, the company itself says. Apple, for example, does bring the ARM architecture to the PC world, but does so with processors of its own design. While the M1 chip is built on the ARM architecture, it does not use the Arm Cortex designs. Those are the main source of revenue.
The statement paints Arm’s recent successes as details in the bigger picture. For example, the world’s largest cloud giant AWS is betting hard on ARM with its own Graviton processors, built on Arm’s own Neoverse design. So even without Nvidia, Arm is making nice gains in the data center world. Moreover, support for the ARM architecture in the data center is growing on all sides. Arm fears, however, that this evolution is again based primarily on the architecture and not on its own designs.
RISC-V
Finally, Arm points to the emergence of RISC-V as an alternative. The RISC-V architecture is open source and thus even more independent than Arm. Moreover, since the start of the acquisition attempt by Nvidia, interest in RISC-V has risen sharply. New designs are positioning the architecture as an interesting alternative for high-end servers. Europe, among others, supports this evolution in its quest for a more independent European chip landscape.
Against that backdrop, Arm wants both cash and expertise to break into the server market with its own designs in a structural way. Only the acquisition by Nvidia would guarantee that. Without an acquisition, there is the threat of an IPO where the focus would be on quick profits. In doing so, Arm is likely to be forced to put away its long-term ambitions for the server market and focus on its mobile processors.
Clear agenda
The statement has a clear mission: to convince regulators worldwide that Arm in the hands of Nvidia can provide more competition instead of less. The two sides argue that the acquisition finally brings real competition for x86 and Intel and AMD. Without the acquisition, that would be absent.