How NVIDIA’s Acquisition of ARM will Change your Computing Experience forever

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A Glimpse at the Deal and how is it likely to change the backdrop of other hardware giants.

The American technology industry giant NVIDIA seems to have a penchant for making headlines. The company had recently taken the world by storm, especially the gamers and Data Science enthusiasts, by announcing their Ampere Range of GPUs– RTX 3070, RTX 3080, and RTX 3090 which were a major improvement over its predecessor, Turing architecture. 

While this was already a huge move in itself, it seems as if NVIDIA was not done with their showstoppers just yet. So yesterday, in a surprising turn of events, NVIDIA announced the acquisition of the British chip-maker company ARM at a hefty price of $40 billion

With around 73% of the GPU market share, simply put, NVIDIA is already ruling the computer graphics department. Its biggest competitor, AMD, with its Radeon range of graphical processing units is nowhere near close, especially when it comes to Data Science and AI-related use as these communities predominantly rely on NVIDIA’s Cuda technology for training and running AI models. However, despite being a leader in its niche market, up until now, NVIDIA’s operations were primarily restricted to research and development of its graphics card lineups. 

Earlier, the company had tried its hands in the CPU department as well with its NVIDIA Tegra range of integrated SoCs (system-on-chip) for mobile devices. However, it’s safe to say that the lineup failed pretty badly as, to be honest, a majority of people haven’t even heard about the existence of an NVIDIA CPU. 

The only big names in the CPU market to this day were-

  • Intel, with around 65% desktop CPU market share,
  • AMD, with a 35% desktop CPU market share, and,
  • ARM, with a whopping 95% mobile CPUs and SoCs market domination. 

NVIDIA, up until now, didn’t even have a CPU market share large enough to be considered for a survey like this.

But this acquisition has suddenly changed the entire scenario. Following the billionaires’ saying of “If you can’t beat them, buy them.”, NVIDIA went from a “nobody” in the CPU division to almost ensuring monopoly over the mobile CPU market once the acquisition of ARM is finalized. 

Before we move on to discussing how this transaction might impact the future of mobile computing, let us first have a look at the details involved in this deal.

To start things off, ARM is a UK-registered chip designing and licensing company that designs SoCs and mobile-architecture based CPU chips for companies like Qualcomm, Samsung, Apple, etc. Before this acquisition, ARM was owned by the Japanese multinational conglomerate SoftBank Group Corporations, which had bought ARM in 2016 for $32 billion. 

Now, NVIDIA and SoftBank have reached an agreement where NVIDIA is acquiring a majority stake in ARM from SoftBank for a total of $40 billion. 

These $40 billion can be broken down as follows-

  • Around $21.5 billion of the total sum would be company shares. 
  • Then, around $12 billion is in cash. Out of the $12 billion cash, an advance payment of $2 billion was made upon the signing of the deal.
  • Around $1.5 billion will be paid to the ARM employees as bonuses.
  • The remaining $5 billion will be paid to SoftBank at a later stage, based on how ARM will perform over the years. 
  • Apart from this, NVIDIA’s official press statement confirmed that post completion of this transaction, SoftBank will continue to own around 10% stake in ARM’s chip design business. 

Seeing the current market scenario, all-in-all, this seems to be a long-term profitable deal for both the companies. 

Now putting these conglomerates and their multi-billion businesses aside, let us understand what this deal might mean to the general public— The Consumers.

For a majority of people, their smartphones are the primary source via which they connect to the rest of the world. One can say that ARM, with a 95% market share in smartphone chip designing controls our mobile computing experiences. Then suddenly out of nowhere, NVIDIA, a company having years of experience in developing and building advanced graphics-rendering solutions, comes and acquires ARM. 

Now imagine the things that the engineers and researchers at ARM+NVIDIA can achieve with their combined niche specialties. For a starter, one certain development that we expect is better graphical performance on mobile devices. While some of the current ARM-based mobile SoCs like Qualcomm’s Snapdragon 865 or Apple’s A13 Bionic are already capable of rendering content at a very high refresh rate of 120Hz, mobile devices are still lagging when it comes to the CUDA technology, that allows machine learning models to be run on the more traditional computer devices. However, now we can expect some interesting developments in mobile SoC architectures, such as built-in support for running deep learning and machine learning models directly on mobile devices

For mobile app developers and machine learning engineers, this directly implies an entirely new horizon of opportunities. For the general public, they can expect their lives and their overall mobile user experience to get better, with a more efficient artificial intelligence integration into their daily lives.

And that’s not it. When it comes to GPUs, the first thing that comes to mind is games. For mobile gamers, this NVIDIA and ARM merger might mean that they could get a better, more fluid gaming performance. Who knows we might also start seeing mobile ports of some of the popular computer game franchises? Fingers crossed for this one!

As per the press statements from the companies involved in this deal, it might take more than a year to finalize everything. This is because since all the parties involved in the deal are multinational companies, it might require seeking permission from the various UK, US, EU, and Chinese authorities. In other words, the possible developments that we just talked about are not coming into the mainstream market anytime soon.

However, if everything goes right, the future for mobile computing certainly seems very bright!

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