Nvidia / Arm deal dubbed as ‘disaster’ by Arm-cofounder
The news that US-based Nvidia will acquire Arm from SoftBank Group in a USD 40 billion deal has already sparked some backlash within the industry. One of the vocal parties is Arm-cofounder, Hermann Hauser, who called the deal a disaster and said that it should be blocked.
“It’s a disaster for Cambridge, the UK and Europe,” Hermann Hauser told Reuters in an interview, referring to Arm’s base in England. “It’s the last European technology company with global relevance and it’s being sold to the Americans.” The co-founder wasn’t all that excited about the sale to SoftBank back in 2016 either and took to twitter to express his displeasure. “ARM is the proudest achievement of my life. The proposed sale to SoftBank is a sad day for me and for technology in Britain,” the Arm’s co-founder tweeted back in July of 2016. While SoftBank stayed on course in regards to Arm’s open-licensing model and maintained its neutral stance on the market. The fear is that the Nvidia deal will risk the destruction of Arm’s business model as “the Switzerland of the semiconductor industry,” Hauser told Reuters. Arm became a powerhouse in the industry much thanks to its decision to allow partners – think Qualcomm, Samsung and Apple – to develop their chips using the architecture of Arm which later became an industry standard. The criticism of the deal is based on the fact that such a key supplier of licensing of designs and IP critical to the industry will fall in the hands of a competitor to the licensees. Another part of the criticism, as pointed out by Reuters, is that the deal would place Arm under the control of a US-based company amid the US – China trade war. Hauser want’s the UK government to place three conditions of the deal; guarantee jobs in Britain; to preserve Arms open business model; and an exception to US reviews on its client relationships, the Reuters report continues. Back when SoftBank acquired Arm, the Japanese company promised that Arm’s headquarters would remain in the in Cambridge and also (at least double) the employee headcount in the UK over the next five years. A promise that will expire in September next year. Nvidia said in it’s press release announcing the deal that it intends to retain the of Arm and expand its base in Cambridge. In an interview with Reuters, Nvidia Chief Executive Jensen Huang and Arm Chief Executive Simon Segars clarifies saying that Nvidia will retain Arm’s United Kingdom headquarters, which will exempt the company from many US export control laws, and open licensing model.