Nvidia’s $40B deal for Arm could affect Apple


Nvidia, best known as a major player in graphics processing, today announced it had locked down a deal to purchase U.K.-based chip licensing giant Arm Limited for $40 billion.

According to Bloomberg, Nvidia will pay Arm’s current owner, SoftBank Group, $12 billion in cash and $21.5 billion in stock, along with other payments, including a signing bonus and possible milestone moneys based on meeting performance targets.

Arm does not manufacture silicon; instead it designs processors. It then licenses those designs for others to customize – or not – before fabricators crank out chips from silicon wafers. Arm’s impact has been massive, primarily because its made-for-mobile chips have powered virtually every smartphone since Apple’s 2007 introduction of its iPhone.

The chips also are at the heart – or brain – of everything from tablets to Internet-of-things (IoT) devices such as sensors and controllers.

Earlier this year, Apple committed to transitioning its Mac personal computer line from processors provided by Intel to designs of its own spun off from licensing Arm. The first such Macs are set to debut before year’s end.

The sale of Arm to Nvidia will give other chip makers pause, but it may impact Apple as well, argued Jack Gold, principal analyst at J. Gold Associates. “Apple is a[n Arm] licensee. But will they want to play with Nvidia once it owns Arm? Apple didn’t want to play with Intel, after all,” Gold said in an interview Monday.

Apple may have valid concerns about an Nvidia-owned Arm, Gold contended.

“Will licensees worry their proprietary use of Arm IP [intellectual property] might somehow be compromised or used by Nvidia?” he wrote in a research note shared with Computerworld. “I think this will be an issue, not in the short term, as you can’t just rip and replace technology, but longer term, especially for the biggest players who have the wherewithal to go it alone and ultimately design out the Arm IP if they perceive it as a risk.”

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