“RISC-V could be a significant beneficiary if this deal progresses — and risk the slow erosion of Arm’s value over time.”

US chip maker Nvidia’s $40 billion mega-deal to acquire chip designer Arm sent shockwaves through the semiconductor industry when it was announced September 14.
Arm does not manufacture chips itself like Nvidia, but rather comes up with the fundamental designs or “instruction sets.”
It licenses these designs out to customers who do make chips, such as Apple, Qualcomm, Samsung, and Amazon, and collects a royalty fee. Arm beat its rival Intel to the punch on designs for low-power, efficient chips, and its technology is now widespread in tablets, smartphones, and other smart devices.
Arm’s success has hinged on this licensing model, since it doesn’t actually compete with its customers.
This could change if Arm is owned by Nvidia, which may opt to grant itself earlier access to Arm’s latest designs at the expense of other licensees.
Arm’s cofounder Hermann Hauser, who is no longer involved with the firm and is lobbying against the acquisition, told Business Insider that a number of major Arm licensees were “not happy” with the deal.
He didn’t name names, but it is notable that none of Arm’s big-name customers have put out statements in support of the acquisition.
Arm and Nvidia have both denied that the deal downgrades Arm’s existing licensees, but nonetheless the shift may benefit a rival open-source architecture called RISC-V.
RISC-V (pronounced “RISC-[Five]) started out as a project at Berkley, University of California, spearheaded by computer science pioneers Krste Asanovic and David Patterson in 2010.
In principle, the idea was simple: rather than charging clients wishing to license its architecture, as Arm does, RISC-V’s architecture remains open-source and effectively free to use.
As Rupert Goodwins of The Register described it earlier this year: “What RISC-V has that Arm doesn’t is extensibility. If you need to add features in the instruction set, go ahead. If you need to tune for very low power or very high throughput, you can.”
Another advantage may be that RISC-V is not subject to US export controls.
RISC-V International, the non-profit membership group established in 2015 to promote and standardize the tech, moved to Switzerland in 2019 after several of the its foreign members raised concerns about potential US trade curbs. The group boasts members such as Qualcomm, Alibaba, and Huawei, and a number of its members are also Arm licensees.
If the Nvidia deal goes through, critics worry is that Arm under a US parent may be vulnerable to Trump’s politicking against China, again threatening its future business (Arm has denied this).
Long before SoftBank confirmed its intention to sell Arm, RISC-V was already being touted as a growing competitor, with VentureBeat reporting that clients were seeking “more design freedom and lower license costs than Arm can provide”.  
Realistically, RISC-V still has a mountain to climb if it hopes to truly rival Arm. As The Economist pointed out in 2019, Arm and Intel offer reliability and additional customer support that the more DIY RISC-V does not.
Nonetheless, Geoff Blaber, VP of research at CCS Insight, said RISC-V would be a “significant beneficiary” of the deal going ahead. 
“It’s unrealistic to think any licensee is happy about this deal. Regardless of whether a licensee competes directly with Nvidia, Arm’s long-term independence cannot be guaranteed,” he said.
“Any licensee concerned about Arm’s future independence will be thinking about their options over the long-term. RISC-V could be a significant beneficiary if this deal progresses, and risk the slow erosion of Arm’s value over time.”
And writing in 2019 when rumors of the deal first began to circulate, Blaber noted: “A long line of Arm licensees are also part of the RISC-V community and steadily upping their investment. There’s a scenario in which Nvidia pays a rich premium for Arm, the very act of which sparks an erosion in its value as focus shifts to a more independent alternative.”
RISC-V is likewise eyeing the opportunity. In a blogpost shortly after the Arm-Nvidia deal was announced, the firm emphasized how “choice drives healthy competition and innovation”. 
The firm wrote: “Today, many people are wondering whether companies will be investing more heavily in RISC-V as a result of our open model for licensing and collaboration or due to the potential limits placed by companies or nations on proprietary architectures. RISC-V is free and open so no single entity controls the technology.”
It continued: “We anticipate that our member companies will continue to rely on legacy architectures for certain product lines, while also looking to RISC-V to meet the increasingly complex workload requirements of next generation applications.
“After all, change doesn’t happen overnight.”