Graphics card manufacturer Nvidia has agreed to buy chipmaker Arm from Japan’s SoftBank Group in a $40 million deal that could have wide-ranging implications.
The acquisition looks to give Nvidia control over one of the most important, behind-the-scenes semiconductor companies. Arm currently designs and licenses the basic blueprints of around 90 percent of the world’s smartphones.
Founded in 1990 as a spinoff of a collaboration between Apple Inc. and Acorn Computer Group, Arm focused on a unique strategy of designing chips that consumed the least amount of energy.
This emphasis on lower power consumption put it in a position to take advantage of the smartphone revolution of the 21st century as phone manufacturers like Apple and Samsung looked for chips that didn’t drain battery life.
Nvidia, on the other hand, falls squarely in the “more power” side of chip making. The company has made a name for itself producing some of the most powerful, and power-hungry consumer-grade 3D graphics processors on the market.
That isn’t the say that Nvidia hasn’t tried its hand in going after the mobile market. The company currently produces the Tegra system on a chip (SoC) series that are, interestingly enough, based on Arm’s architecture.
The acquisition then could be seen as giving Nvidia a leg up in the mobile space. That said, Nvidia CEO Jen-Hsun Huang has claimed that the main reason for the acquisition is to push AI technology by marrying Nvidia’s AI platform with Arm’s ecosystem.
“AI is the most powerful technology force of our time and has launched a new wave of computing,” said Huang. “In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today’s internet-of-people. Our combination will create a company fabulously positioned for the age of AI.”
Righting past wrongs
Regardless of the reason behind it, Nvidia’s acquisition of Arm looks to help the company make up for missed opportunities in the past.
Back in the mid-2000s, chipmaker AMD actually approached Nvidia for a possible merger as the former was looking for a way to produce its own graphics chips to compete with Intel’s onboard graphics.
The talks fell through, however, after Nvidia’s Jen-Hsun Huang insisted on being the CEO of the combined company.
As a result, AMD instead purchased ATI—maker of the Radeon line of GPUs—resulting in the rivalry between AMD and Nvidia we see today.
The acquisition of Arm means that Nvidia now finds itself at the control of a major CPU manufacturer, one whose architecture is set to be used in future Macs from Apple—another company Nvidia is feuding with.
Around 2010, reports started coming in about Nvidia notebook graphics cards in Macs failing at a “higher-than-normal rate.” This eventually caused Apple to switch over to AMD’s graphics cards instead.
The rift between both companies further widened last year when Apple dropped official support for Nvidia’s CUDA parallel processing architecture. This caused issues with customers still on Nvidia graphics cards who may have been relying on them for a number of features, such as hardware-accelerated ray tracing, a welcome tool used by animator and developers that’s currently exclusive to Nvidia (at least until AMD’s RDNA2 hits later this year).
With Nvidia now owning the architecture that Apple is set to use for its next-gen Macs, the merger might eventually force the latter to start working with the former again.