Last year, Nvidia announced that it would be acquiring the chip maker Arm for a whopping $40 billion. The deal between the two is said to be the largest deal ever in the semiconductor industry. This deal holds significant importance over the semiconductor industry, and not only that, but it also an important matter for the rest of the world.
As we know, silicon chips have become an essential part of everyday life, and they are making our devices intelligent. We can connect to the Internet to stream on-demand movies, control the security of our homes remotely, etc.
The most important field which Arm has significant influence over is AI. The company produces the chip designs, which it then licenses to the company. And Arm does not have any policy as not to share it with any particular company. Let’s not forget that Apple’s widely acclaimed M1 chip is based on the Arm architecture. And all the smartphones currently existing in the world are powered by chips made using Arms design.
Currently, Arm has invested heavily in new chip technologies, which have made the company earn prestige in the latest 5G and cloud market. But, for a company such as Arm to make a firm stand in the was field, it needs to expand its scope, expand the business, and invest more heavily in new technologies. And that’s where NVIDIA comes in.
The graphics maker announced that it would invest in Arm, and it will expand the roadmap of research and development. NVIDIA already has a firm background in the AI market, and its AI leadership will give Arm’s UK-based engineers access to technology and resources that Arm alone would not have. Would, It will also help the company to invest in and grow its UK-based talent.
However, many in the market speculate about what the future of Arm with NVIDIA will look like. Many in the industry have openly stated their disapproval by suggesting that it will be better for the company to have an initial public offering (IPO). But many are concerned that Arm will leave the UK after this deal, and some fear that Arm will become anti-competitive.
Concerning all those issues, both the companies administrators have stated that the combination of Arm and NVIDIA is a better outcome than an IPO. When you consider the investment required to go up a level in AI is unprecedented, and with NVIDIA’s backing, Arm can make progress more easily. Arm initially got a lot of investment when SoftBank acquired it. The company built new technologies that expanded its reach into data centres, the automotive and networking industries and retained its leadership in mobile.
However, now that it has combined with NVIDIA, it will receive a completely new scale, resources, and agility needed to maximize the opportunities ahead. Arm believes that the deal is the best opportunity for its customers and will also enable the UK to be a meaningful industry player in the age of AI.
