One of Arm’s co-founders, Hermann Hauser, has been critical of the planned takeover of Arm by Nvidia in an open letter to British Prime Minister Boris Johnson. He argues, among other things, that the sale to Nvidia will destroy Arm’s business model.
Hauser says in his open letter that Arm is now a “Switzerland of the semiconductor industry,” treating its more than 500 customers in a balanced way. Most of these customers are competitors of Nvidia, according to Hauser. The co-founder is concerned that Nvidia will receive preferential treatment from Arm after the acquisition, to the detriment of competition from Nvidia. This, according to Hauser, would ‘destroy’ the basis of the British company’s business model.
The Austrian believes that as part of the deal between Nvidia and SoftBank, there should be a legal obligation that Nvidia will not receive preferential treatment towards other Arm customers. According to Hauser, this should be a necessary condition from the UK authorities for approval of the acquisition.
In the letter, Hauser also argues for job retention in the United Kingdom. The co-founder fears that if Nvidia decides to move Arm’s headquarters to the United States, it will be at the expense of thousands of jobs in the UK. He also fears that the UK will lose economic independence, because the takeover will bring Arm under US regulation. In that case, according to Hauser, the US Office of Foreign Assets Control decides with whom Arm can do business, rather than allowing the British authorities to do so. As part of the deal, Arm must be outside OFAC regulation, Hauser said.
Hauser is sending the letter to Johnson, as the British government must authorize Nvidia’s acquisition of Arm, announced Monday. The co-founder prefers Johnson not to give that permission, but rather that the Prime Minister ensures that Arm becomes a publicly traded company with the British government making an initial major investment of £ 1 to 2 billion. This would better safeguard Arm’s independence, Hauser claims.
According to TechCrunch, Nvidia CEO Jensen Huang said during a press conference on Monday that Arm’s independence and business model will be safeguarded. The CEO emphasizes that Arm will remain neutral to all customers and that the company wants to expand Arm’s licensing portfolio with technology from Nvidia. Hauser argues, however, that “statements that are not legally binding” should not be believed.
Tom’s Hardware writes on the basis of the press conference that Nvidia is considering producing more server CPUs based on Arm architecture. Huang said companies can choose to make their own CPUs based on the Arm licenses, ask Nvidia to make a semi-custom chip, or buy an Nvidia chip. “All those options are possible, we want the ecosystem to be as comprehensive as possible,” said Huang.
Nvidia buys Arm from SoftBank for $ 40 billion. In addition to the British authorities, the Chinese, European and American governments also have to give approval. The companies expect the transaction to be completed in eighteen months.