Last night, I had the chance to talk with Cristiano Amon, President, and CEO-Elect of Qualcomm, about the big news that I believe rounds out its IP portfolio in a big, big way. This morning, the company officially announced that it acquired upstart datacenter CPU company NUVIA for $1.4B in a cash deal. Also included were 18 (yes, 18) extensive industry support quotes from an avalanche of global industry leaders in software and application ecosystems, smartphones, PC makers, automakers, and tier 1s.
When I first started researching NUVIA at the end of 2019, I said here that I believed that the company was "the most interesting, if not the most interesting chip startups out there right now." I joke that I am not always right, but I'm typically right about things that matter most in the tech world. Thankfully, I was right about NUVIA as it is now being acquired a mere 14 months after its A-round for $1.4B.
I believe this is an excellent move by Qualcomm. The company currently has incredibly wide and deep IP and designs for wireless, RF, GPU, DSP, and NPU crossing smartphone, personal computer, automotive, and the edge infrastructure markets. It licenses its CPU designs from Arm. Most companies in the mobile space do this, and this strategy has served Qualcomm and others well. But it is hard to distinguish its CPUs from its competitors. Apple has been running up the score on all mobile CPUs lately, leveraging its mobile designs upstream into the M1 for the MacBook.
Amon, in a statement, explains that with NUVIA, "together with our industry-leading graphics and AI - will take computing performance to a new level and drive new capabilities for products that serve multiple industries."
With NUVIA, I believe Qualcomm now has the IP and talent to go head-to-head with CPU designs from Apple, AMD on power and performance. I do not say this lightly. NUVIA said it wanted to tape out a design this year, but we will have to see what Qualcomm intends to do. I would expect Qualcomm to retarget NUVIA's IP to the smartphone and PC versus getting into the general-purpose server CPU market.
Talent is critical here as I believe the founders were instrumental in Apple's M1 designs and its follow-on architecture. As I said in a previous write-up, co-founders "John Bruno likely modeled the [M1] performance gains, Gerard Williams was likely its CPU architect, and Manu Gulati was likely its SoC architect."
I have always agreed with what Gerard Williams, CEO of NUVIA, said in a prepared statement that, "CPU performance leadership will be critical in defining and delivering on the next era of computing innovation." I have always been a believer in heterogeneous computing. However, we cannot forget about the CPU as it's the most flexible compute, the easiest to program, and is inextricably linked to the memory subsystem.
NUVIA’s B round lead investor, Mithril Capital, also weighed in on the talent in a statement. “NUVIA epitomizes what we look for in a business,” Mithril founder Ajay Royan said. “NUVIA was launched to reimagine silicon for a world creating exponentially more data than it can process. The company’s co-founders—Gerard Williams III, Manu Gulati, and John Bruno—are among the leading silicon designers of this century, having spearheaded generations of successful efforts at Google, Apple, AMD, and ARM, among other companies.”
Most acquisition announcements only include the acquiree and the acquired, but this acquisition announcement included some of the highest-level folks in:
- Mobile and PC software and application ecosystems: Microsoft's Panos Panay and Google's Hiroshi Lockheimer
- Smartphones: Samsung's TM Roh, Xiaomi's Lei Jun, Honor's Biao Wan, OnePLus's Pete Lau, OPPO's Tony Chen, VIVO's Shen Wei, HMD's Florian Seiche, Sharp's Shigeru Kobayashi
- PCs: HP’s Alex Cho, Lenovo’s Gianfranco Lanci
- Automakers and auto electronics: GM's Dan Nicholson, Continental's Peter Popp, Bosch's Andree Zahir, Panasonic's Masashige Mizuyama, Renault's Thierry Cammal, LG's Jin-Yong Kim
While I was surprised to see such a public outpouring of support, I suppose I shouldn't be too surprised as this is classic Qualcomm, which serves as an industry orchestrator. It's been great to see another orchestration as Amon and his team have pulled off so many of these industry collaborations in the past. When the company said it wanted to accelerate 5G, it assembled 45 companies across the globe. When it said it wanted to virtualize edge infrastructure with VRAN, it pulled together 15 key partners. And here we are with compute, and the company gets initial support from 18 companies.
None of this could have happened without funding from early investors. Round A's$53M in funding was led by Capricorn Investment Group, Dell Technologies Capital, Mayfield, Nepenthe LLC, and WRVI Capital. Round B's $240M in funding was led by Mithril Capital in partnership with Sehat Sutardja and Weili Dai (founders of Marvell Technology Group), funds and accounts managed by BlackRock, Fidelity Management & Research Company, LLC., and Temasek, with additional participation from Atlantic Bridge, Redline Capital, Capricorn Investment Group, Dell Technologies Capital, Mayfield, Nepenthe LLC, and WRVI Capital.
Mithril investor Peter Thiel was obviously pleased. In a statement, Thiel said, “One of the things that Mithril has done incredibly well is to stay disciplined and differentiated. Ajay [Royan] catches a wave before others do.”
As I have been saying for what seems like forever, silicon is strategic, and Qualcomm's acquisition of NUVIA reinforces this. While I am in awe of most of Qualcomm's IP, I always thought it should amp up its CPU with its own design like it did in the early Snapdragon days. It's easy for me to say this on the analyst's sidelines, and I understand why it chose to invest in other IPs. However, as Apple kept leaning into its custom CPU and brought it to the PC and Qualcomm expanded into broader markets, it was evident that Qualcomm had to make a move. You never want to "Babe Ruth" anything because we won't see final silicon in a device for years, but Qualcomm is an execution machine, and I have very high hopes.