Arm CEO: Being acquired by Nvidia is the best choice

Latest update time：2021-07-04

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Responding to speculation surrounding NVIDIA's imminent acquisition of Arm, Arm CEO Simon Segars explains why the deal presents incredible opportunities for the UK, Arm and anyone using Arm technology.

Simon Segars, CEO of Arm

Last year, NVIDIA, a world leader in artificial intelligence (AI), made headlines around the world when it agreed to acquire Arm for $40 billion, the largest deal ever in the semiconductor industry. This history-making deal is an extraordinary investment in our talent and in the UK, and will advance our leadership in AI, the most important technology trend today.

You’ve probably heard a lot about semiconductors (or chips) lately. Whether it’s news about demand for chips, geopolitical struggles casting a shadow over the industry, or car shortages – the industry has suddenly become a topic of discussion around the world.

That’s because chips have become an essential part of everyday life, making our devices smart. Silicon chips allow our TVs to connect to the internet to play movies, thermostats to adjust themselves to minimize our homes’ energy usage, and cars to tell us if someone is in our blind spot.

If there’s one device we can’t live without, it’s our mobile phones. In 1997, only 20% of UK households had access to one; today, over 95% of homes have at least one.

Artificial intelligence will become the most important technology in the next 50 years

Arm technology is a critical part of the hardware “brains” of many of these chips. We are not a chip company, but we create designs that are licensed to semiconductor companies around the world. Our products are used by more than 500 licensees to power billions of smart devices in homes, classrooms, factories and hospitals around the world. The smartphone has been the defining product of the past decade, and it is built on an Arm processor.

But technology is advancing fast. Now we are entering the era of artificial intelligence, and it’s clear that AI will be the most important technology of the next 50 years. Whether it’s being used by automakers to develop self-driving cars or by medical researchers to accelerate the discovery of life-changing drugs, AI is going to become ubiquitous.

Throughout Arm’s history, we have focused on low-power, high-performance processors that support a broad range of customer designs, where long battery life is critical. This model has been very successful for us, especially in the mobile space.

AI will be fundamentally different. The world’s AI leaders will deliver highly specialized new technologies and tools, providing discrete software and systems for scientific computing, healthcare, and many other industries.

Under our current owner, SoftBank, we have made significant investments in new chip technologies, which have enabled us to enter new markets such as 5G networks and cloud computing. But this work is just a start and will not be enough to achieve our future ambitions. To lead in AI, Arm needs to expand its business and invest in new technologies.

Combining Arm’s expertise with NVIDIA’s AI leadership

NVIDIA is a perfect complement to Arm. Combining our expertise with NVIDIA’s AI leadership will give Arm access to technologies and resources not available to Arm alone. NVIDIA’s significant investment in the UK and Arm will expand our R&D roadmap and enable us to invest in and develop our talent in the UK. Our engineers will be able to adapt and enhance NVIDIA’s AI technology for our customers, create new IP originating in the UK, and expand Arm’s reach in technology.

There has been a lot of ill-informed speculation about what Arm would look like after it was acquired by NVIDIA. Some thought an IPO would be a better path. Others worried that Arm would leave the UK, while some worried that Arm would become anti-competitive. These assumptions couldn’t be further from the truth, and I want to address them head-on.

The combination of Arm and NVIDIA is a better outcome than an IPO. The level of investment required to lead in AI will be unprecedented. We have been down this path before when we predicted a major shift in the market in 2016. We knew we needed to invest heavily in products, people, and technology to capture the opportunities ahead. The initial investment came from SoftBank’s acquisition of Arm; it has enabled us to build new technologies and extend our reach into the data center, automotive, and networking industries, while maintaining our leadership in mobile.

Now is the time for us to scale to the next level to meet the technological challenges of the future. We considered an IPO but decided that pressure to deliver short-term revenue growth and profitability would stifle our ability to invest, expand, move fast and innovate. Partnering with NVIDIA will give us the scale, resources and agility we need to maximize the opportunities ahead. This transaction is the best opportunity for Arm and our customers and will make the UK a meaningful industry player in the age of AI.

Expanding opportunities for Arm customers

Arm will remain headquartered in the UK, and we will be able to increase our investment in UK talent. The UK is already recognised as a leader in AI research and academia; together with NVIDIA, we have the ambition to make the UK a hub for the AI world.

NVIDIA will not be pulling investment away from the UK. Instead, it will invest in expanding Arm’s headquarters in Cambridge and building a world-class AI research facility. At its core will be one of the world’s most powerful supercomputers, powered by Arm technology, which will enable scientists, engineers and researchers to carry out groundbreaking work and accelerate the development of local and international ecosystems. The combination of Arm’s technology and NVIDIA’s deep expertise in AI will make the UK a leader in research, innovation and scientific discovery for decades to come.

The collaboration between Arm and NVIDIA will expand opportunities for Arm customers and continue our commitment to our open licensing business model. In 30 years, Arm has grown from a small team of 12 founding engineers in a barn outside Cambridge to a global leader in establishing industry standards that serve the entire semiconductor industry.

The economic and commercial imperatives of Arm’s business

We create value in our company through an open licensing business model, ensuring our customers around the world have access to the same Arm technology.

This is the economic and commercial imperative of Arm’s business, and it is also simple common sense. Arm and NVIDIA are heavily dependent on other companies across the industry, so continuing with our open licensing model is not only the best option, it is the only option.

"We will work with NVIDIA to develop new markets, not displace customers in existing markets. This transaction opens avenues for more innovation that the entire semiconductor industry can use to create technology that makes cars safer on the road, accelerates the development of lifesaving medical technologies, powers autonomous systems, gets us back to offices more safely, and revolutionizes the education of our nation's young people."

"Arm is without a doubt one of the UK's great technology success stories. I have built my career here and I am incredibly proud of what we have achieved. Our impact in technology and semiconductors has been enormous; this deal ensures our legacy continues and thrives in the world of AI."

"Partnering with NVIDIA will give us the scale and resources we need to tackle the complexities of next-generation technologies in a way that would be impossible otherwise. This is an exciting prospect and one I firmly believe represents the best future for our company and ensures the UK remains at the forefront of computing for the next 30 years."

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