NVIDIA and Arm have reached an agreement but the deal is far from finalized according to recent reports. Worries aren’t just being raised by others in the industry regulators. Although the opinions of those regulators will likely deliver the most weight. The UK government and stakeholders in the industry have also expressed concerns about the potential takeover.
What are the concerns in this deal between Arm and NVIDIA?
There are effectively three separate categories with regard to concerns expressed surrounding the buyout of Arm by NVIDIA. But each of those stems from Arm’s position in the mobile and technology industries. Namely, Arm is a chip design company utilized by nearly every smartphone maker on the planet. That holds even where chips are made by Qualcomm, Huawei, or Samsung. The company boasts over 500 licensees in the tech industry.
So the primary source of agitation is the possibility that NVIDIA will degrade Arm’s neutral position.
Some of Arm’s largest licensees, for example, operate out of China. NVIDIA is a US company. So its takeover of Arm sets off alarm bells for that segment of the industry. Especially since the US and China are presently embroiled in a trade war that’s spurred or worsened component availability for Huawei, ZTE, and others. Even apps haven’t avoided that fray.
Coinciding with that concern, industry regulators and the UK government has expressed concerns that NVIDIA might move operations out of the UK. Arm stands as one of the UK’s biggest businesses, headquartered in Cambridge.
NVIDIA’s response is poised but not backed by anything concrete
NVIDIA has not yet addressed the concerns in its deal with Arm. Or at least not in any legally-binding manner. Arm co-founder Herman Hauser is seeking to change that.
Mr. Hauser hopes to persuade Prime Minister Boris Johnson to place conditions on the sale. Specifically, those would be conditions centered on the above-mentioned potential issues. But also conditions centering on the fact that some of Arm’s clientele is directly in competition with NVIDIA.
For NVIDIA’s part, CEO Jensen Huang claims that nothing will change at Arm in terms of jurisdiction. The company plans not only to keep everything in the UK. But also to grow the company. Including the creation of a world-class AI lab in Cambridge. The center would be designed to pull in the best computer science talent in the world and would be home to some of the region’s most powerful supercomputers.
NVIDIA also notes that it’s willing to work with the UK government to make the deal work. But that hasn’t moved forward just yet. So it may take some time for the deal to be finalized if it is at all.