Yahoo Finance Nvidia deal is an ‘absolute disaster’ for the UK, Arm co-founder says
The $40bn (£31bn) sale of chip designer Arm to Nvidia is an “absolute disaster” for Cambridge, the UK and Europe, according to one of Arm’s co-founders.
Hermann Hauser said that the sale of the Cambridge company to American technology business Nvidia could result in key decisions about its chips being “made in the White House and not in Downing Street”.
“I think this is terrible,” Mr Hauser in an interview with BBC Radio 4's Today programme. “It’s the last European technology company with global relevance and it’s being sold to the Americans.”
Hauser added that the deal would destroy Arm’s business model as “the Switzerland of the semiconductor industry”.
There is fear over a conflict of interests because Nvidia produces its own processors. That means many of Arm’s clients, which compete with Nvidia, will be dependant on a rival.
The co-founder of Arm called on the Government to require Nvidia to put in place legally binding commitments to retain Arm’s UK headquarters and to promise not to lay off any staff from the business.
Nvidia’s chief executive Jensen Huang said on Sunday evening that he would keep Arm’s Cambridge headquarters. He also promised to build a new artificial intelligence research centre in the UK.
However, Mr Hauser called these pledges “meaningless unless they’re legally enforceable”.
“Our Government always has to look at whether legally these nice words that everybody always says during M&A negotiations can actually be legally enforced. That was exactly the problem we had with the takeover of Cadbury by Kraft,” he said.
Arm is legally bound to increase staff numbers until next October, a result of its 2016 sale to Japanese conglomerate SoftBank. Nvidia has said it plans to grow in Britain but has not made any concrete commitment on job numbers.
The Government has already said it will “not hesitate to investigate” if it believes a deal to acquire Arm would have a significant impact on the UK. Ministers have legal powers to intervene under 2002’s Enterprise Act.
Mr Hauser urged the Government to intervene on Monday, suggesting that it should help Arm to float on the London Stock Exchange to “make it a British company again.”
