Qualcomm Will Invest in ARM if NVIDIA Acquisition Fails

With the NVIDIA acquisition of ARM now unclear, Qualcomm announced that it is ready to invest in ARM should the acquisition fail. So why is there resistance from NVIDIA’s acquisition, what did Qualcomm, and why is it a potentially bad idea?

Why is there resistance against NVIDIA acquiring ARM?

The acquisition of ARM by NVIDIA was supposed to be a simple trade; take some of our money and shares, we get ARM, and everyone walks away happier and richer. Unfortunately, however, the reality of the acquisition has been a nightmare for NVIDIA with multiple barriers in the way. From a disgruntled CEO in China to governments investigating the deal, it seems that the world is hell-bent on preventing the acquisition.

With the exception of the angry man refusing to give up his position in ARM China, the vast majority of complaints against the acquisition come from the fear that ARM will lose its standing as a neutral processor supplier. Of all CPU technologies used, ARM is arguably one of the most important due to its widespread use, its ability to be used in both low-power devices and high-performance applications, and the fact that anyone can integrate an ARM core into their design so long as they pay for a license fee. 

To keep the playing field fair, ARM has a policy of being neutral whereby it does not favour any individual company. The technology that ARM develops is a result of what the industry as a whole needs. If a customer requires a specialized technology solution that only benefits their product, they will have to develop this solution themselves or hire engineers to develop the work. Even if ARM developed this solution for said company, it would not integrate the solution into its processors, seeing the contracting company take a share from license fees. 

However, if NVIDIA were to acquire ARM all of this could change. While NVIDIA themselves do not produce CPUs, they are major designers of GPUs, and these often go hand-in-hand with CPUs. Thus, if NVIDIA had control of the decision making processes at ARM, they could in theory introduce advantages that only work with NVIDIA GPUs. 

As such, NVIDIA would be able to enter markets that ARM sell into and convince ARM users to switch to NVIDIA GPUs (this would help to defeat NVIDIA competitors). Considering how ARM is now entering the home PC market with the introduction of the Apple M1, such a move could be extremely damaging to hardware manufacturers.

Qualcomm Announces Intention to Invest in ARM

With the NVIDIA acquisition of ARM on hold, Qualcomm announced that it would be investing in ARM if the acquisition fails. Qualcomm also mentioned that it would be purchasing a share of ARM alongside other major industrial companies such as Tesla and Amazon. To persuade regulatory bodies to reject the acquisition, Qualcomm also mentioned that there are many companies against the acquisition. The acquisition would also be harmful to the British firm’s independence and potentially harmful to the British economy.

NVIDIA hit back at Qualcomm and other companies stating that their acquisition of ARM will not affect ARMs status as an independent company. However, NVIDIA also mentioned that they are looking to implement their AI technology into the architecture so that ARM processors will perform better on AI tasks. This statement alone already proves that NVIDIA is looking to interfere with the design process and ARM and intends to use its technology in the processor technology. 

Is Qualcomm investing in ARM a bad thing?

While not the same as an acquisition, Qualcomm purchasing a share of ARM does raise cause for concern when considering the business practices of Qualcomm. From integrating their technology into global standards to charging customers for technology licenses that they do not use, Qualcomm is far from perfect in this situation. It could be argued that Qualcomm themselves are being highly hypocritical.

While Qualcomm having a portion of ARM would not be able to control it outright, it would give Qualcomm a foot in the door to ARM and its decision-making process. Furthermore, Qualcomm’s somewhat immoral businesses practices could easily spread into ARM management and see a push towards unfair licensing terms. Thus, a company that complains about how NVIDIA will harm ARMs reputation as an independent business could end doing the exact same thing.