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It revolves around whether an IPO would be better for Arm than being bought by Nvidia.
Everyone involved seems to agree that Arm’s open licensing model, with all customers being treated equally, should be preserved.
Which of the two options of either an independent Arm after an IPO or an Arm owned by one of its customers would be more likely to preserve the open licence model?
It’s a no-brainer.
The other big issue is: Would an independent Arm or an Nvidia-owned Arm be more likely to invest in the R&D programmes which Arm requires to maintain its viability?
On the principle that the prospect of being hanged in the morning focusses the mind wonderfully, it is clearly more likely that Arm would invest as a priority to keep itself alive than Nvidia would invest in Arm when it is just one of many competing priorities for investment.
It is argued that Arm doesn’t have the money to invest sufficiently to remain competitive, but Arm managed to invest enough to stay competitive for 26 years as an independent company before it was bought by Softbank.
Furthermore no one knows how much free cash an IPO might raise for Arm to spend on R&D.
While, after saving the company from Nvidia, the UK government might well find ways to keep Arm’s R&D programmes fully funded.
Softbank has said repeatedly that it intended to return Arm to the public markets and that is what it should now do.
Or. Everyone get an option to fund ARM each year in perpetuity. Nobody controls, and ARM is funded
A possible way forward would be to allow partners to appoint their own independent auditor to confirm fair-play and identical costs for the products that they license. The partners would get a simple “nod” but no competitive data.
It’s a worthwhile idea, Neil, and the Arm-Nvidia lot haven’t, so far, put up anything like it – except for wishy-washy statements of respecting the open licensing model.
@Neil Macmillan – And centralized control of production from Moscow seemed sensible in 1919.
Sorry to be a pedant, but there would be no ‘I’ in an ARM IPO. ARM had an Initial Public Offering back in the late 1990s when it was floated simultaneously on the Stock Exchange and NASDAQ. Prior to the IPO, it was owned jointly by Acorn, Apple, VLSI Technology and a Japanese bank. The centre-of-mass in investment was already foreign, and there was no uproar at the time regarding ownership slipping out of British hands.
Excellent points Neil. Arm’s always been mainly foreign-owned but HQ’d in England and I agree with you that the foreign ownership thing is a red herring. The key point is maintaining the open licence business model and that is threatened if Arm is bought by one of its customers.
Nvidia needs a microprocessor. Intel needs graphics. Neither one can afford a hostile takeover of the other. A merger is not possible because of bad blood between them.
If the ARM market cap is not some multiple of $30 Billion then Nvidia would initiate a hostile takeover. An ARM IPO should raise plenty of cash for softbank. ARM must then dilute the stock or float bonds to raise cash for itself.
AMD has an ARM license to modify the design. If ARM does not keep pace with Apple then AMD could begin licensing a better ARM than ARM itself. However AMD policy is partnerships rather than hostile relationships. I see an ARM/AMD joint license agreement coming.
I think you’ll find the ARM architectural licences are quite restrictive. For most you can only sell the design in a product you manufacture such as a Mac or Samsung phone, whilst the original Intel licence which allowed them to sell ICs went to Marvell.
Also I think AMD has enough problems keeping ahead of Intel, without trying to split R&D to another architecture.
Speaking of the “original Intel license”, AFAIK, Qualcomm and Samsung (even during Mongoose time) was allowed to sell the IC. Perhaps i missed something or misunderstood your point?
Yes Qualcomm is same as Marvell, as is Ampere. I might be wrong but I think I read the chips Samsung sells to third parties can only use the ARM designed cores whereas their own phones can use their own designs.
Meizu 15 Plus (among others) was powered by Samsung custom (Mongoose series) big core.