Chief executives described the value and purpose of Nvidia’s proposed $40B purchase of Arm in a joint interview that mimicked earlier comments they have made --plus a little nuance about how the combination will be good for Arm’s hundreds of licensees.
Questions from analyst Patrick Moorhead, founder of Moor Insights & Strategy, focused on several areas including the deal’s effect on Arm’s independence and the economic and symbolic impact on the UK where Arm is based.
There was no mention in the 30-minute interview about progress of the deal’s regulatory review by various countries. A spokeswoman said afterwards that Nvidia remains confident approval will occur in early 2022 but described the status of the review as private. The interview streamed Thursday during the Six Five Summit.
Why buy Arm when Nvidia already has a CPU with Grace? Moorhead asked at one point. Why not just continue to license what Arm does?
“We don’t have to buy Arm. Nvidia is doing well. Nvidia has a great strategy ahead. We don’t have to buy Arm, I want to buy Arm. The combination is going to be great for the ecosystem,” Nvidia CEO Jensen Huang said.
ARM CEO Simon Segars expanded: “Through the combination with Nvidia, we’re going to have a lot more resources to bear in creating an even richer portfolio of IP. And there’s no way we can do that on our own…It’s a different world…We need a different approach to go and address that and keep providing all these technologies that our licensees are asking for.”
Huang noted that a “few” people want Arm to remain independent and have “equated independence with goodness…However, Simon and I both recognize that going into the future, independence doesn’t equate to strength [or] vibrancy in the ecosystem…I think there’s a fallacy in equating independence with strength and vibrancy of Arm, which is ultimately what the customers of Arm want. They want not just an open Arm, an independent Arm, what they want is a strong Arm and a strong Arm that allows them to go into these wonderful new markets. ”
The Nvidia CEO again said Arm design functions will stay in Cambridge “where there are no equals…We have every intention to not only continue to do [design work] there, but to invest in doing it more there.” He said the opportunity is to grow that headquarters and also bring Nvidia’s ability to invest in AI research and robotics research and computational biology “to help the UK become a center of world-class development. I think we have something really, really special as a starting point.”