View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Leadership
  2. Digital Transformation
September 14, 2020updated 15 Sep 2020 11:46am

Arm Founder: UK Could Be “Blocked from its Own Technology”

"This puts Britain in an invidious position"

By CBR Staff Writer

Dr Hermann Hauser, a founder of British chipmaker Arm, says an agreed $40 billion sale of Arm to US rival NVIDIA could result in “American vassalage” and result in the UK being blocked from “our own microprocessor technology” — in an outspoken intervention against the landmark deal agreed by both companies’ boards this week.

He spoke out after NVIDIA signed up to the largest semiconductor acquisition the market has seen; agreeing to pay Arm’s Japanese owner SoftBank a total of $21.5 billion in NVIDIA stock and $12 billion cash in the highest profile dealhigh-profile, high-impact tech deal since IBM’s $36 billion buyout of Red Hat in 2018.

Despite pledges by NVIDIA to keep jobs and innovation in the UK (including the launch of a new tech incubator and construction of an Arm-powered supercomputer) the buyout is likely to result in job losses and diminished UK influence over the company, he said; pointing to Kraft’s contentious 2010 buyout of Cadbury.

“Secondly, the sale of ARM to Nvidia will destroy the very basis of ARM’s business model which is to be the Switzerland of the semiconductor industry dealing in an even-handed way with its over 500 licensees. Most of them are Nvidia’s competitors. Among them are many UK companies”, Hauser, a co-founder of Arm and Fellow of the Royal Society who is now a partner at Amadeus Capital Partners, noted in a public letter.

Recent UK M&A activity has been dominated by cash bids from private equity firms and overseas buyers. An alternative would have been for the government to step in and take Arm public, with a dominant “golden share” to block hostile bids and to support “national economic security”, Hermann Hauser argued.

In a letter addressed to the Prime Minister, he wrote: “As you have spent £500m to help OneWeb out of Chapter 11, which arguably is not as important to Britain as ARM, you could spend £1-2bn as the anchor investor for an IPO on the London Stock Exchange. An IPO was always the declared route to liquidity for Softbank.”

(Hauser does not spell out why he considers Arm, already owned by Japan’s SoftBank, to be any more important to Britain than other home-grown company. While the UK does put strict protection around a very limited subset of technical capabilities — and companies producing them — for example in the cryptography and associated hardware domain, it has traditionally taken a hugely laissez fair approach to foreign buyouts).

Content from our partners
Green for go: Transforming trade in the UK
Manufacturers are switching to personalised customer experience amid fierce competition
How many ends in end-to-end service orchestration?

Do you agree with Hermann Hauser? Is he trying to shut the stable door long after the horse has bolted? Let us know your thoughts

 

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU