The $40bn deal, one of the largest in the semiconductor industry, is set to produce a major force in fabless semiconductors targeting artificial intelligence but has been attacked by observers for removing the independence of IP provider ARM and potentially impairing its business. By Nvidia's own estimation the deal could take as much as 18 months to clear regulatory hurdles that could be thrown in its path.
The conference calls painted a picture of a combined Nvidia-ARM that would be a 30-year champion for the era of artificial intelligence. And that ARM would continue to license technology out using an open business model. Indeed, Huang frequently said that one purpose of the deal was to give Nvidia's GPU and AI technology access to customers via the IP licensing business model.
First line of defence
Most analysts bowled the fairly straight ball at Huang that if the deal went through, Nvidia would be competing with its customers; that this could be bad for Nvidia's chip sales and for ARM's IP licensing.
Huang's first line of defence was that as it stands ARM and Nvidia barely compete with each other and so IP licensing would continue in an open and neutral manner. In 2019 Nvidia shipped 100 million chips mainly into the data center while ARM technology shipped in 22 billion chips across all embedded fields, he said. "We're [Nvidia is] in very few mobile communications. We're in very few embedded applications." He added: "We love the business model. It will stay open and fair and we'll offer even more IP," said Huang.
So, Huang's position appears to be different delivery mechanisms for different application sectors.
Next; Conflict of interest