NVIDIA Refuses To Yield To Setbacks With Arm Deal & Expands CPU Design Facilities

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Chip designer NVIDIA Corporation is intent on taking the ball to chip behemoth Intel Corporation's proverbial court when it comes to developing central processing units (CPUs). NVIDIA is the world's largest graphics processing unit (GPU) designer and is widely credited to ve invented the modern day GPU. Advances in semiconductor fabrication and the growth in data generated by corporations and consumers have resulted in the GPU playing a major role in large scale enterprise use cases such as data centers, and recent market surveys have demonstrated that NVIDIA is a leading player in the data center GPU market.

However, the company lacks a product in the data center CPU segment, and at this front, it is ardently striving to acquire British design house Arm Ltd. However, the acquisition attempt is not proceeding according to NVIDIA's hopes, yet the company is aggressively pushing forward to develop a datacenter CPU. This is evidenced by a new research and development center set up by NVIDIA in Israel, which will expand the facilities to include CPU research as well.

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This bit of news reported Globes and the Times of Israel outlines that the U.S. chip company has grown its R&D activities in the Middle Eastern country to also focus on CPUs. They quote NVIDIA's chief technology officer, Mr. Michael Kagan, as stating:

“Israel, with its unique wealth of talent, is a key player in the global tech ecosystem, and we are excited to be creating a new CPU group here,” said Michael Kagan, Nvidia’s chief technology officer in a statement Tuesday. “We look forward to further growing our local R&D activities both in this area and in our extensive work supporting the local ecosystem through unique programs for startups and developers,”

NVIDIA's first CPU codenamed Grace was announced in April last year. Image: NVIDIA Corporation

NVIDIA announced its first CPU, codenamed Grace, in April last year. Grace will be available exclusively to data center customers, and it will be designed using the Arm instruction set architecture (ISA).

The announcement of expanding R&D in Israel comes as America's largest chip designer in terms of market capitalization continues to face hurdles in multiple jurisdictions for its multi billion dollar bid to acquire British design house Arm Ltd. NVIDIA announced the deal in September 2020, and the deal is facing close scrutiny in the United States and the United Kingdom.

American watchdog, the Federal Trade Commission (FTC) has proceeded with legal action against NVIDIA for partaking in a deal that the FTC believes would generate serious anticompetitive outcomes. Similarly, the British Competiton and Markets Authority (CMA) has also raised concerns that the deal will place Arm's customers, many of which compete with NVIDIA, at a disadvantage since the GPU designer will be able to prevent them from acquiring the British company's designs which have become ubiquitous in the technology industry.

NVIDIA has rejected these claims in its latest filing with the CMA. The company believes that instead of generating anticompetitive externalities, its acquisition bid will ensure that Arm is able to compete in the data center CPU market. NVIDIA believes that Intel Corporation and other companies such as Qualcomm Incorporated do not want the deal to go ahead since together NVIDIA and Arm will be able to create an alternative for Intel's x86 CPUs for data center use. Additionally, it has also stated to the CMA that should the affair not proceed, then Arm will have little incentive to develop data center technologies, which will in turn cement Intel's position in the segment as the world's largest data center CPU provider.

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