Arm’s sale is a tragedy that will undermine Britain’s future security

Linda J. Dodson

What happened to Dominic Cummings? To national tech champions? It’s all very well snapping up OneWeb, a satellite company with not many of the wrong kind of satellites for our purposes, but companies like Arm are where the battle to control the future will really be played out. Surely ministers should be promising vigorous action, aiming to shepherd Arm to its rightful destination – not in some nationalised portfolio (nothing could stymie innovation faster) – but the bosom of the market, listed on the FTSE, an independent company, poised to soar. 

Because it could, and perhaps should, soar.

A couple of years ago, I sat in a rather unglamorous office above the staff canteen on Arm’s Cambridge campus with the chip designer’s co-founder Mike Muller. 

Muller, like Masayoshi Son, boss of Softbank, was then fascinated by the possibilities of the Internet of Things (IoT) – a world in which not just computers and smartphones, but almost every object, no matter how humble, would be connected to the internet. 

“There will be a crossover,” Muller said, “where we go from having chips in obvious things you think of today, like mobile phones, to chips in things you would never imagine – like light sockets, the packaging around water bottles, the plaster you put on your skin after cutting yourself…” 

Such devices would become “smart”. A smart plaster might be able to spot wound infection early, for example. The explosion in connectivity would also propel the number of Arm-licensed chips from the billions to the trillions. And the reason Muller and I were in that unglamorous office was that a shiny new campus was being built at Arm to deliver just that vision.

Today Simon Segars, Arm’s CEO, will tell you that they succeeded. He will say Arm took note that its chip designs for mobile devices –  the business which had powered Arm’s profitability – was beginning to plateau. That it diversified by working on both chip and security-system designs for everything needed to run the IoT, from the endless individual devices at its edge to the huge data centres that will run them at the core.

The only problem with the strategy was that, in a period of meteoric growth – and valuations – for many tech companies, Arm stalled. In 2016, when Softbank bought it, Arm was worth about the same as Nvidia. Today, Nvidia is worth $300bn, almost 10 times as much. Now Jensen Huang hopes that, with Nvidia bringing some artificial intelligence (AI) know-how to automate and link smart devices, Arm’s IoT potential will finally be unleashed. 

But this will actually double, not diminish, the tragedy of Arm’s sale.

Even as things stand, that sale already risks depriving the UK of a key player in IoT and chip design. The UK will miss out, just as we missed out on key tech trends so many times before. Think cloud computing, or mobile data. Where are our champions? It’s not that we never had them, it’s that we sold them.

Arm, whatever Jensen Huang may say, is already stocked with great AI talent. And the UK is still, with its unrivalled universities churning out the world’s finest brains, a significant player in AI. But they need somewhere to go. Arm’s sale means one big destination is closed off. 

As it goes, it is likely to leave the UK poorer not just in one vital, emerging, growth technology – IoT – but in AI too.

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