Nvidia exec love-bombs Arm's licensing model, almost protests too much

'Their open licensing model is absolutely one of the greatest licensing models out there'

Nvidia has no plans to dismantle Arm's licensing-based biz model, enterprise veep and CFO Colette Kress has said, touching on one of the key concerns voiced by industry as competition regulators probe the proposed $40bn buyout.

Speaking at the Raymond James Institutional Investors Brokers Call, the exec bean counter described Arm's licensing model as “one of the greatest” in tech, and tried to assuage fears that new owner Nvidia would disrupt it.

“Arm has been a 30-year tremendous success, the most energy-efficient CPU out there, a developer base that is quite enormous and serves a wide range of customers from mobile to PC to data centre to IoT. The interesting thing is Nvidia also can bring to them the overall capabilities of acceleration and AI, which that paired with an overall energy efficient CPU is a great opportunity for the overall market," Kress said.

We do promise to keep it open, keep its licensing open...

Reminding one of a certain former US president, she added: “We love their licensing model. Their open licensing model is absolutely one of the greatest licensing models out there. Our ability to take some of our technology and license through their open model is absolutely one of the great things that we can do with the overall Arm acquisition.

"We are confident [the deal] will close, and we do promise to keep it open, keep its licensing open and make sure that our customers have the assurance of that existing business model that we will keep,” she added.

Arm licenses the instruction set architecture (ISA) and processor cores used in the vast majority of smartphones and embedded systems. In addition, its wares have gradually built a toe-hold in the PC and server space, with Apple notably switching from Intel’s processors to its own Arm-based Apple Silicon chips in 2020. Cambridge-based Arm – which was purchased by Softbank in 2016 – competes with Nvidia in the GPU space with its Mali line, which has long eclipsed Nvidia’s Tegra series in market share.

Nvidia’s $40bn purchase of Arm, first confirmed in September, will need to win regulatory approval in the UK, China, and the US.

The deal has faced stiff opposition from rivals in the semiconductor and consumer tech spaces over fears Nvidia would be incentivised to kneecap its competition by dramatically altering the terms in which it licenses Arm's intellectual property.

In the UK, the Competition and Markets Authority (CMA) has said it will closely scrutinise Nvidia’s planned takeover of the firm in order to determine whether it will have a market-distorting impact. The CMA solicited feedback from affected third parties in January, and is expected to release its findings later this year.

Anshel Sag, analyst at Moor Technologies, welcomed Kress's comments, regarding them as indicative of a more fundamental change in Nvidia’s outlook. “I think it’s a positive development because Nvidia has not traditionally been very good at the licensing side of things,” he said. “Nvidia is very good at developing new technologies, productising them and enabling them through its ecosystems – but not necessarily making them accessible to any and all interested parties.”

This lack of flexibility, Sag argued, has resulted in Nvidia losing ground in some areas compared to its rivals, with the example of games consoles and smartphones cited.

“This could be a side effect of Nvidia not having the PlayStation or Xbox console deals and AMD licensing its GPU architecture to Samsung. Yes, Nvidia does have the Switch, but I believe that Nvidia would like to expand the influence of its GPU architectures,” he added. ®

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