Arm’s sale puts a dent in the UK’s $1tn tech ambitions

Linda J. Dodson

Nvidia’s Huang, however, dismisses such concerns. Arm’s technology, he says, would remain of UK origin, meaning it is exempt from US sanctions. Even if Nvidia used its AI know-how to customise Arm’s processors, it would be a “drop in the ocean” compared to the three decades of IP that Arm has put into its chips.

However, Huang also faces the challenge of convincing Arm’s hundreds of clients that it is in Nvidia’s business interests, as a potential competitor, to keep it neutral.

This is because Arm historically has supplied a vast array of chip companies, such as Apple, Qualcomm, Samsung, Huawei, and even Nvidia itself.

By buying Arm, Nvidia controls this supply, helping it gain the edge on rival Intel. The deal will allow it to expand aggressively into smartphones and Intel’s previous stronghold of PC processors. 

But Huang and Simon Segars, Arm’s chief executive, maintain that keeping an arms-length relationship will be key to growing the business. 

“Independence is definitely part of our strength,” Segars says. “We may be part of a different parent company, but the intent is to continue to operate with a level of independence.”

Some clients may be less sure of that commitment. “We maintain the view that an acquisition by Nvidia would be extremely damaging long-term for Arm and its partners,” says Geoff Blaber, an analyst at CCS Insight.

Michael Dimelow, a former Arm vice president, adds: “What is the core reason they are buying Arm? If I was an Arm customer now I would be asking how is Arm going to remain independent? How will I know my roadmap doesn’t leak to Nvidia? The most brutal assessment would be that this deal enables Nvidia to monopolise Arm’s processor roadmap, combine with its graphics leadership position, and take out the likes of Intel and Qualcomm.”

In the long term, analysts believe the deal could prompt current Arm customers to work on building their own architecture for processors. This could take years, but recent developments have seen rival systems spring up. One is Risc-V, a project founded by Berkeley University professors to build a fully open-source rival to Arm. If Risc-V proves a success, it would erode the value of Arm’s Cambridge-made technology.

For the deal’s proponents, the takeover means a huge new investment into UK technology, albeit controlled by Nvidia’s Santa Clara headquarters.

Huang has promised a hiring spree in Cambridge to build “one of the world’s leading AI innovation centres in the UK”. It will also build a new AI supercomputer in Cambridge, joining Nvidia and Arm’s technology.

He says that by combining Nvidia’s AI computing IP with Arm’s microprocessors, it can “expand Nvidia’s AI computing platform to Arm’s broad ecosystem” and bring more powerful capabilities to billions of devices.

Despite these lofty aims, he must convince regulators in the UK, US, China and Europe, that the deal is not a competition threat. That process could take 18 months. And while these pledges offer high praise of Arm, they are not yet set down in legally binding assurances. SoftBank, which acquired Arm in 2016, agreed to a huge hiring pledge, but this runs out in 2021.

There are some critics he is unlikely to convince. 

“The only thing that you need to pay any attention to at all is if they make statements that they’re willing to make legally binding,” says Hauser. Hauser had hoped Arm would ultimately float again in the UK, creating an independent company once more.

Some former employees see the deal as swansong for a company that was once Britain’s most promising technology bluechip, now in the hands of a bigger, punchier US rival.

“Goodbye Arm”, says one former employee. “It’s a sad day.”

Those hoping the UK can one day build an independent $1tn tech success story might now be looking elsewhere.

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