Home / SmartTech / The co-founder of ARM launches the “Save Arm” campaign to maintain independence in a Nvidia deal worth 40 billion US dollars – TechCrunch

The co-founder of ARM launches the “Save Arm” campaign to maintain independence in a Nvidia deal worth 40 billion US dollars – TechCrunch

ARM Holdings, the UK semiconductor company, made history for the second time today and became the country’s largest tech exit when Nvidia announced over the weekend that it was getting it for $ 40 billion in an all-stock deal from SoftBank would buy. (ARM’s first appearance in the record books? At SoftBank announced in 2016 that it would acquire the company for $ 32 billion.)

But before you can say, advanced reduced instruction set calculator, the deal has a little problem. One of ARM’s co-founders has launched a campaign to get the UK to meddle in the deal or cancel it and opt for a public listing backed by the government.

Hermann Hauser, who co-founded the company in 1

990 as a spin-out from Acorn Computers, has written an open letter to British Prime Minister Boris Johnson saying he was “extremely concerned” about the deal and how it is going will affect jobs in the country, ARM’s business model, and the future of the country’s economic sovereignty regardless of US and US interests.

Hauser also created a website to raise public support – savearm.co.uk – and for that purpose also started collecting signatures from business people and others.

He calls on the government to intervene, or at least put in place legislative provisions linked to the passage of the deal, to guarantee jobs, find a way to force Nvidia not to receive preferential treatment over other licensees, and one Exemption from the CFIUS regulation to ensure that UK companies are guaranteed unrestricted access to our own microprocessor technology. “

The letter, and the general wave of backlash released in the wake of last night’s acquisition news, underscores interesting – and, as you could long-term argue, larger – topics about technology in the UK or, more generally, about tech giants outside the UK or the US China.

In short, it raises questions about why ARM can’t try to grow as an independent company, why it made a Softbank acquisition for the first time, and why the UK isn’t going to do more to build its own, support local tech giants.

These questions are more important. Hauser is immediately of the opinion that with the acquisition of the company by a US company, future sales of the company will also be subject to US export regulations – an important point since so much business is done with Chinese companies and companies in return do business with China , all of which must comply with the CFIUS regulations, he notes.

“This puts the UK in the insidious position that the decision to whom to sell ARM is made in the White House, not Downing Street,” he writes. “In the past, sovereignty was mostly a geographic issue, now economic sovereignty is just as important. The transfer of Great Britain’s most powerful trading weapon to the USA makes Great Britain a US vassal state. “(Bonus points for the Nvidia / insidious word game, Hermann.)

Nvidia CEO and co-founder Jensen Huang and Arm CEO Simon Segars were no doubt prepared for critics to slam the deal.

“This will drive innovation for both companies’ customers,” Huang once said, adding that Nvidia “will maintain ARM’s open licensing model and customer neutrality … We love ARM’s business model. In fact, we intend to expand the licensing portfolio of ARM to expand access to Nvidia technology. Our two ecosystems are enriched by this combination. “

Hauser’s answer? “Do not believe any statements that are not legally binding.”

On the employment side, Hauser’s letter notes that ARM employs thousands of people and its partner ecosystem spans Cambridge (headquartered), Manchester, Belfast, Glasgow, Sheffield and Warwick. “Moving headquarters to the US will inevitably result in the loss of jobs and influence in the UK, as we saw with Kraft’s acquisition of Cadbury,” he writes.

ARM’s business model is based on the concept that the company is a “Switzerland” in the semiconductor industry and supplies reference designs to a large number of licensees, many of whom may also compete against each other and who also compete against Nvidia. He is convinced that by controlling the company, Nvidia will inevitably not make these relationships sustainable.

But back to the biggest problem of all, at least as it is outlined to address the UK government, ARM’s position as a company independent of US interests is paramount.

ARM is the only UK technology company with a dominant position in wireless communications, with microprocessors found in a wide variety of devices and a market share of around 95%. This helps the company differentiate itself from those of the “FAANG” group of giant corporations Facebook, Apple, Amazon, Netflix and Google who dominate in their respective fields (ARM does not compete with any of them, and does not necessarily work with them all) .

“Since the American president has armed technology dominance in his trade war with China, Britain will be collateral damage unless it has its own trade arms to negotiate with. ARM powers the smartphones of Apple, Samsung, Sony, Huawei and practically every other brand in the world and can therefore influence all of them. “

Hauser’s response isn’t the first time a founder has been critical of how ARM’s business was turned over to one buyer and then to another.

Back in August, when the rumors of Nvidia interest first surfaced after SoftBank’s disastrous financial results, another co-founder and ex-president of the company, Tudor Brown, spoke out against SoftBank’s handling of the company’s inherent problems, when Nvidia buys it as a “solution” for it.

As we wrote at the time of the SoftBank contract, SoftBank wanted to use the acquisition to drive a giant leap into Internet of Things technology – essentially leverage ARM’s business model and relationships with hardware manufacturers to create a new one Wave of IP investments around semiconductors for networked businesses are securing devices rather than doubling down on the areas that have got “hot” in processors like AI and implementations in autonomous systems.

This turned out to be a disastrous move, as the Internet of Things was nowhere near as great a business opportunity as everyone thought – or at least the Internet of Things didn’t perform as people predicted it would.

Tudor’s attitude towards Nividia is very similar to Hauser’s. Selling to a company that is essentially competing with your company’s customers makes it very difficult, if not impossible, to maintain independence and assurance that you are giving everyone equal access to your products.

Of course, one could argue that Nvidia wouldn’t have bought the company for $ 40 billion just to drive it into the ground. But if that deal is in stock and Nvidia plays the long game, maybe it’ll end up winning one way or another?

We asked Nvidia for a response on the Save Arm initiative and will update it as we learn more.

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