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Nvidia to Acquire Arm for $40B

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Re: Nvidia to Acquire Arm for $40B

#441

Post by fluffything »

bencollier49 wrote: post #434
tomalpha wrote: post #427

Earlier quoted context omitted.

I would have liked to see ARM remain owned in the UK. I think it's proven itself capable of innovation and organic growth on its own. But how can we evaluate the whether that will continue? What if ARM is not sold, and then (for whatever reason) stagnates, doesn't innovate, gets overtaken in some way, and enters gradual decline? Perhaps that's unlikely, but prevent the sale, period is feels too absolute.

That feels like giving up, to me. We should have the confidence that British industry can development and flourish on its own merits without being sold off to foreign interests.

What have confidence when we can just look at ARM financials?

There are more ARM chips sold each year than those of all its competitors together. Yet ARM's revenue is 300 million $.

Why? Because ARM lives from the ISA royalties, and their revenue on the cores they license is actually small.

With RISC-V on the rise, and west sanctions against china, RISC-V competition against ARM will only increase, and it is very hard to compete against something that's good / better and has lower costs (RISC-V royalties are "free").

I really have no idea why NVIDIA would adquire ARM. If they want a world-class CPU team for the data-center, ARM isn't that (Graviton, Apple Silicon, Fujitsu, etc. are built and designed by better teams). ARM cores are used by Qualcom and Samsung, but these aren't world-class and get beaten every gen by Apple Silicon. If they want ARM royalties, that's high risk business, and very low reward (there is little money to make there).

The only ok-ish cores ARM makes are embedded low-power cores (not mobile, but truly IoT So none of this makes sense to me, except if NVIDIA would want to "license" GPUs with ARM cores to IoT and low power devices like ARM does, but that sounds extremely far-fetched, because nvidia is super-far away from a product there, and also because the margins for those products are very very thin, and nvidia tends to like 40-60% margins. You just can have those when buying IoT chips for 0.12$. Its also hard to sell a GPU to these use cases because they often don't need it.

Re: Nvidia to Acquire Arm for $40B

#442

Post by kd5bjo »

HenryBemis wrote: post #393
siberianbear wrote: post #333

Earlier quoted context omitted.

In addition, it's not even a valid argument if the cost was entirely in cash. One would be making the argument, "the cost is essentially free because although we spent $40B, we acquired a company worth $40B". Obviously, that's not any more correct than the case of paying in stock.

Correct, if it's shares, they just dilluted the value of the stock. If I owned 1% of the company, after printing and handing out $40bn worth of stock, then I keep the same amount of stock, but now it's (e.g.) 0.5%, which means I just lost 50% of that investment. Which means I will receive 50% of the dividend (since out of the next year's dividend 'pool' someone will get a big chunk. Which means NVidia just screwed th…

> If I owned 1% of the company, after printing and handing out $40bn worth of stock, then I keep the same amount of stock, but now it's (e.g.) 0.5%, which means I just lost 50% of that investment. Which means I will receive 50% of the dividend

Well, you’re now getting 50% of the dividend produced by the new combined entity. If the deal was correctly priced, your share of the Arm dividend should exactly replace the portion of your Nvidia dividend that you lost through dilution.

Re: Nvidia to Acquire Arm for $40B

#443

Post by bananaface »

manquer wrote: post #429
Blammar wrote: post #243

No one has seemed to notice the following two things: "To pave the way for the deal, SoftBank reversed an earlier decision to strip out an internet-of-things business from Arm and transfer it to a new company under its control. That would have stripped Arm of what was meant to be the high-growth engine that would power it into a 5G-connected future. One person said that SoftBank made the decision because it would hav…

It is not "free", it means current shareholders of Nvidia are paying for the remaining money. Their stock is diluted on fresh issue of shares.[1] The $12B comes from Nvidia the company, the remaining money comes from Nvidia's shareholders directly. [1] Only if the valuation of ARM is "worth it" the fresh issue of shares will not cost the current shareholders anything. This is rarely the case , if Nvida overvalued(or…

And note that the $12B is also owned by Nvidia's shareholders (they own the company which owns the cash), so they're paying for that too.

It's just different forms of shareholder assets being traded for other assets, by the shareholders (or rather, their majority vote).

Re: Nvidia to Acquire Arm for $40B

#444

Post by fauigerzigerk »

siberianbear wrote: post #333
pathseeker wrote: post #296

Earlier quoted context omitted.

>Also, to first order, when a company issues stock to purchase another corporation, that cost is essentially "free" since the value of the corporation increases. This isn't correct. If investors thing Nvidia overpaid, its share price will decline. There are many examples of acquiring companies losing significant value on announcements to buy other companies even in pure stock deals.

In addition, it's not even a valid argument if the cost was entirely in cash. One would be making the argument, "the cost is essentially free because although we spent $40B, we acquired a company worth $40B". Obviously, that's not any more correct than the case of paying in stock.

I agree that paying in new shares doesn't make the acquisition free. But the value of shares is an expectation of future cash flows. If that expectation is currently on the high side for Nvidia and on the low side for Arm then paying in shares makes the acquisition cheaper for Nvidia than paying cash.

Nvidia is essentially telling us that they think their shares are currently richly valued. I agree with that.

Re: Nvidia to Acquire Arm for $40B

#445

Post by fluffything »

zdw wrote: post #306
AnthonyMouse wrote: post #175

Earlier quoted context omitted.

> The perpetual architecture license folks that make their own cores like Apple, Samsung, Qualcomm, and Fujitsu (I think they needed this for the A64FX, right?) will be fine There is one thing they would need to worry about though, which is that if the rest of the market moves to RISC-V or x64 or whatever else, it's not implausible that someone might at some point make a processor which is superior to the ones those…

> Their best move might be to forget about the architecture license and make the switch to something else with the rest of the market. This assumes that there isn't some other factor in transitioning architecture - this argument could boil down in the mid 2000's to "Why not go x86/amd64", but you couldn't buy a license to that easily (would need to be 3-way with Intel/AMD to further complicate things) Apple has done…

Apple could transition in 10 years to RISC-V, just like how they transitioned 10 years ago to x86, 10 years before to PPC, 10 years before to .........

Re: Nvidia to Acquire Arm for $40B

#446

Post by bananaface »

fauigerzigerk wrote: post #444
siberianbear wrote: post #333

Earlier quoted context omitted.

In addition, it's not even a valid argument if the cost was entirely in cash. One would be making the argument, "the cost is essentially free because although we spent $40B, we acquired a company worth $40B". Obviously, that's not any more correct than the case of paying in stock.

I agree that paying in new shares doesn't make the acquisition free. But the value of shares is an expectation of future cash flows. If that expectation is currently on the high side for Nvidia and on the low side for Arm then paying in shares makes the acquisition cheaper for Nvidia than paying cash. Nvidia is essentially telling us that they think their shares are currently richly valued. I agree with that.

Not necessarily. They could just prefer to be diversified. It can be rational to take a loss of value in the pursuit of diversification (depends on the portfolios of the stakeholders).

They could also think their shares are valued accurately but believe the benefits of synthesis would increase the value.

Re: Nvidia to Acquire Arm for $40B

#447

Post by rocqua »

ImprobableTruth wrote: post #431
p1necone wrote: post #291

Earlier quoted context omitted.

NVIDIAs whole schtick is making a bunch of interesting software and arbitrarily locking it to their own hardware. Doesn't seem compatible with being the steward for what has up until now been a relatively open CPU architecture.

arbitrarily? Nvidia invests a lot in software R&D, why should they just give it away to their competitor AMD who basically invest nothing in comparison?

Arbitrary as in, without technical reasons.

An open architecture, and business model based on partnership doesn't really synchronize with vendor locking your products for increased profits.

Re: Nvidia to Acquire Arm for $40B

#448

Post by p1esk »

sillysaurusx wrote: post #119
option wrote: post #106

Earlier quoted context omitted.

no they are not. Go read recent MLPerf results more carefully and not Google’s blogpost. NVIDIA won 8/8 benchmarks for publicly available SW/HW combo. Also 8/8 on per chip performance. Google did show better results with some “research” system which is not available to anyone other then them yet.

This is a weirdly aggressive reply. I don't "read Google's blogpost," I use TPUs daily. As for MLPerf benchmarks, you can see for yourself here: https://mlperf.org/training-results-0-6 TPUs are far ahead of competitors. All of these training results are openly available, and you can run them yourself. (I did.) For MLPerf 0.7, it's true that Google's software isn't available to the public yet. That's because they're i…

transitioning to Jax (and by extension, Pytorch)

Wait, what? Why would transition to Jax imply transition to Pytorch?

Re: Nvidia to Acquire Arm for $40B

#449

Post by fluffything »

paulmd wrote: post #116
baybal2 wrote: post #70

Earlier quoted context omitted.

Bye bye ARM Mali =(

This is NVIDIA's "xbox one/PS4" moment. AMD has deals with console manufacturers, their clients pay for a huge amount of R&D that gets ported back into AMD's desktop graphics architecture. Even if AMD doesn't make basically anything on the consoles themselves, it's a huge win for their R&D. Now, every reference-implementation ARM processor manufactured will fund GeForce desktop products, datacenter/enterprise, etc as…

> Now, every reference-implementation ARM processor manufactured will fund GeForce desktop products, datacenter/enterprise, etc as well.

That's like throwing pennies onto a pile of gold. NVIDIA makes billions of yearly revenue. ARM makes ~300 million. NVIDIA revenue is 60% of a GPU price. ARM margins in IoT/embedded/phone chips are thin-to-non-existent. If anything, NVIDIA will need to cut GPU spending to push ARM to the moon. And the announcement already suggest that this will happen.

Re: Nvidia to Acquire Arm for $40B

#450

Post by mikkelam »

Ecco wrote: post #322
topspin wrote: post #154

Earlier quoted context omitted.

My instincts are telling me this is smoke and mirrors to rationalize a $40E9 deal. The only part of that that computes at all is the GPU integration, and that only works if NVIDIA doesn't terrorize Arm licencees. The rest is buzzwords.

Want to be nerdy and use powers-of-ten? Fine by me! But then please go all the way: $4E10!!!

That's normalized scientific notation, nothing wrong with 10E9. This is also allowed in several programming languages such as python.
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