ARM: UK-based chip designer sold to Nvidia

By Singh Kelian
Technology desk editor

Image copyrightGetty Images / ARM

UK-based computer chip designer ARM Holdings is being sold to American graphics chip specialist Nvidia.

The cash-and-stock deal ARM is valued at as much as $ 40bn (£ 31.2bn).

It is hit by the current owner, the Japanese conglomerate Softbank, four years after it was acquired by ARM for $ 32bn.

Among many other devices, ARM’s technology is at the heart of most smartphones.

Nvidia has promised to keep the business based in the UK, hire more staff and maintain ARM’s brand.

It added that the deal would create “the leading computing company for the age of artificial intelligence” (AI).

“ARM will be headquartered in Cambridge,” US firm chief executive Jensen Huang said in a press release.

“We will expand on this great site and build a world-class AI research facility in support of developments in health, life sciences, robotics, self-driving cars and other fields.”

Image copyrightReuters
image CaptionJensen Huang is a Taiwanese-born entrepreneur who founded Nvidia in 1993
This appears to allay concerns that British jobs will be lost and the decision-maker will be transferred to the US. Last week, the Labor Party urged the government to intervene.

But two co-founders of the company had also raised other issues regarding the acquisition.

Herman Hauser and Tudor Brown suggested that ARM should remain “neutral” and not owned by a company like Nvidia, which produces its own processors.

The concern is that ARM’s customers will become dependent on a business with which many will also compete for sales.

In addition, the two co-founders also claimed that once ARM was owned by an American firm, Washington could try to prevent Chinese companies from using it as part of a wider trade conflict between their countries Was.

Nvidia has stated that it intends to maintain “global customer neutrality” that made ARM a success.

Chip makers

ARM creates computer chip designs that others then adapt to their own ends. It also develops instruction sets, which define how the software controls the processor.

It is based in Cambridge, but has offices worldwide including a joint venture in Shenzhen, China.

Hundreds of companies license their innovations, including Apple, Samsung, Huawei and Qualcomm. To date, ARM states that 180 billion chips have been made based on its solution.

When SoftBank acquired ARM, it promised to keep the company headquartered in the UK and increase the number of local jobs, which it did.

California-headquartered Nvidia surpassed Intel in July to become the world’s most valuable chipmaker.

So far, it has specialized in high-end graphics processing units (GPUs). These are commonly used by gamers to deliver more detailed visuals, as well as by professionals for tasks including scientific research, machine learning, and cryptocurrency “mining”.

But Nvidia is also one of ARM’s customers, using its designs to build a Tegra Computer Processing Unit (CPU).

Under the terms of the deal, Nvidia will pay SoftBank $ 21.5 billion in its stock and $ 12bn in cash. If some targets are met, it will further follow cash or stock up to $ 5bn.

Nvidia will also issue $ 1.5bn in equity to employees of ARM.

This is a deal that the person who founded ARM says is a disaster.

And many in the UK’s technology industry will agree with Herman Hauser.

He protested the sale of the chip designer to SoftBank in 2016, but admitted that the Japanese firm stood with its guarantee to promote employment and research in Cambridge.

But Nvidia, one of the many companies that license ARM’s designs, poses a threat to its business model – why would hundreds of its other customers now believe they would have equal access to technology?

In recent times, leading figures in the Cambridge technology sector have lobbied Downing Street, calling on ministers to intervene to bring Britain into ownership. There are indications that the government is considering a more proactive industrial policy.

Dominic Cummings, who spoke of the need for a trillion dollar tech company for the UK, is leading the drive for a more interventionist approach.

Now, with Herman Hauser and others warning that the deal will make Britain a US vassal state, the government is being pressured to ensure that control over important domestically developed technology is not controlled by a foreign power Be lost.

Related topics

  • Computing

  • ARM Holdings