Nvidia Develops Arm Architecture PC Chips, Intel Stock Price Goes Down in Response

Intel's stock price fell slightly on Monday due to reports that NVIDIA is developing ARM based CPUs for the PC market.

According to an unnamed source, Nvidia has quietly started designing CPUs based on Arm architecture specifically for running Windows. This development is clearly part of Microsoft's broader vision, aimed at expanding the operating system to more ARM based systems after the exclusive agreement with Qualcomm expires next year.

Nvidia is not unfamiliar with ARM based CPUs. In the data center, Nvidia has challenged Intel and AMD through Grace Hopper and Grace CPU superchips.

Nvidia has also long manufactured ARM compatible chips for handheld game consoles and tablets, such as its own Nintendo Switch. In addition, NVIDIA has licensed the Arm kernel for its low-power Jetson accelerator for robotics and edge applications. For example, its Jetson AGX Orin module uses eight Arm Cortex-A78AE CPU cores.

In fact, Nvidia has previously produced Arm CPUs for the PC market. Microsoft's first Surface tablet (not a Pro tablet) was equipped with Nvidia's Arm compatible Tegra SoC and a customized Windows system.

AMD is also developing PC hardware using Arm IP, and both manufacturers' systems may be available as early as 2025.

It is no secret that AMD has considered developing chips based on the Arm instruction set. Former Chief Financial Officer Devinder Kumar of AMD stated in 2021 that if customers have sufficient demand, the company is open to it. It is worth noting that AMD has adopted the Arm core in several products, including its Versal FPGA.

After the news spread, Intel's stock price fell by more than 3%, followed by a slight rebound, while Nvidia and Arm's stock prices rose by 3.8% and 4.9% respectively.

In the past few years, the ARM based PC market has made significant progress, largely thanks to Apple's decision to abandon Intel as a CPU supplier and instead adopt the ARM architecture license to develop chips. With the launch of the new Mac Pro earlier this year, all modern Macs now use the Arm chip.

As for Qualcomm, it has been committed to entering the personal computer and data center markets for many years. The company's chips are used in various personal computers, the most famous of which is the SQ series processor developed in collaboration with Microsoft for its Surface series products. Qualcomm also acquired Nuvia, founded by a former Apple chip engineer, in 2021 to accelerate this effort. However, this transaction later sparked a lawsuit between Arm and Qualcomm, accusing the latter of violating the license agreement.

It is expected that Qualcomm will share new details on next-generation PCs and mobile chips at the Snapdragon Summit in the near future.

Dylan Patel, Chief Analyst at Semi Analysis, believes that NVIDIA and AMD's experience in the PC field, especially in GPU, may give them a competitive advantage over Qualcomm.

A report suggests that NVIDIA hopes to continue leveraging its investment in Tegra and leveraging ARM based chips to enter the PC laptop field. Currently, the biggest challenge facing Windows on Arm is not the ARM CPU, but the compatibility issue with Qualcomm's GPU driver. NVIDIA does not have this issue, so their promotion on Windows on Arm may be more successful

Similarly, there are rumors that AMD is collaborating with Microsoft to produce Arm-based semi custom SoCs for the surface series. AMD's GPU will not have driver issues either. It is clear that Qualcomm's window of opportunity is closing, their exclusive agency rights are running out, and competitors are joining the fray

Arm and Nvidia declined to comment.