Nvidia vows to invest in Britain as part of Arm deal

[LONDON] The head of Nvidia vowed to step up investment in Britain and increase jobs there as part of its US$40 billion purchase of chip designer Arm, following complaints from an Arm co-founder that the deal would destroy the company.

Nvidia, the biggest US chip company by market capitalisation, has agreed to buy Arm from Japan's SoftBank.

The most important technology company in Britain, Arm's energy-efficient designs dominate the smartphone sector, with its licensees including Apple shipping 180 billion chips to date.

SoftBank, which only bought Arm in 2016, had previously agreed to strict rules to buy Arm, such as retaining its headquarters in Cambridge, England, and increasing jobs - a commitment that Nvidia CEO Jensen Huang reiterated on Monday.

"We want to grow Arm and make it become even greater," Mr Huang told analysts on a call, adding Arm would hire more engineers, spend more on research, and run a new artificial intelligence research centre in Cambridge.

"The UK government will realise that we are making a very significant investment in the UK," added Mr Huang. He stopped short, however, of making formal job guarantees and said talks with the national government had yet to begin in earnest.

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The deal, announced overnight, drew criticism from Hermann Hauser, a co-founder of Arm who told Reuters in an interview that it would spell disaster for Cambridge, the UK and Europe.

"It's the last European technology company with global relevance and it's being sold to the Americans," he said.

The deal would, he fears, risk jeopardising Arm's position as the "Switzerland of the semiconductor industry" where it allows hundreds of companies such as Apple, Samsung and Qualcomm to develop their own chips using its architecture.

If the company's British character and open business model could not be protected, it would be better for Prime Minister Boris Johnson's government to back a flotation on the London Stock Exchange, Mr Hauser said.

Industry and potential anti-trust concerns over the deal relate to the fact that Nvidia competes with hundreds or Arm's customers - including the likes of Apple and Intel - whereas tech investor SoftBank does not.

Nvidia's Mr Huang said he would retain Arm's neutral licensing model and expand it by licensing out Nvidia intellectual property for the first time.

The head of Arm, Simon Segar, told the same analyst call a purchase by an American company would not affect which countries it sold to.

Britain's government will scrutinise the deal including what it might mean for the company's headquarters in England, a spokesman for Prime Minister Boris Johnson said on Monday. "We are investigating this deal further and ministers have spoken to the relevant companies," the spokesman said

Neil Campling, head of TMT research at Mirabaud, said it was unlikely that Britain would block it.

"I expect Nvidia to give commitments to maintain the intellectual property investment and leadership," said Campling, adding Nvidia would play up its heft as the world's most valuable semiconductor company to reassure the UK government.

REUTERS