The UK has announced it will intervene in the proposed acquisition of ARM by Nvidia, citing national security concerns around the transaction. Britain’s Digital Secretary, Oliver Dowden, issued the notice of intervention in the $40B sale, which was announced in the fall of 2020.
The UK announcement isn’t big on details. It states that the “Secretary of State for Digital, Culture, Media and Sport is able to intervene on national security grounds,” and that “This responsibility is discharged in a quasi-judicial capacity.” Dowden is said to have reached the decision to intervene based on “advice received from officials across the investment security community.”
A Matter of National Security?
The announcement of an investigation on the basis of national security should not be read to mean that Britain thinks Nvidia is somehow leaking state secrets to mainland China, Russia, or another geopolitical adversary. Concerns about the way this acquisition could impact the global balance of power in the semiconductor market exist, but Nvidia is not under that type of scrutiny.
ARM doesn’t directly manufacture CPUs. Instead, it develops licenses for both its underlying ISA and discrete, specific, physical cores. You can sign an ARM license allowing you to build a compatible CPU of your choosing, or you can license a specific and particular CPU design, pair it with some other I/O and SoC blocks, and create a “custom” chip for yourself built using off-the-shelf IP at a major foundry. In the past ARM was an independent company, but it’s currently owned by Softbank, which wishes to sell its stake.
ARM has long-term plans for the high-performance computer market.
ARM has never been owned by a company that was also a licensee of its hardware. If Nvidia is allowed to buy ARM, the design firm whose chips power virtually the entire mobile market would be owned by one of the companies that license its designs. There are fears that Nvidia could exploit its own ownership of ARM to give itself a critical advantage in the market. Regulators in the EU have expressed concerns over this arrangement, and while the UK is no longer part of the EU, it clearly has its own fears on this topic as well.
Opinions on whether the deal will go through are easy to find, and different authors identify different pain points, both with the EU and with China, which has its own reasons not to allow the merger. So long as ARM is primarily affiliated with British companies, China can try to argue that its use of ARM IP shouldn’t be affected by ongoing sanctions levied by the US. If ARM becomes an American company, that argument goes out the window.
The UK has previously indicated it would investigate the proposed merger, so today’s announcement isn’t a surprise. A number of companies that compete with Nvidia in various markets all spoke out against the merger alleging various antitrust concerns. Nvidia has addressed some of the concerns, by guaranteeing that jobs and development centers would remain in Cambridge, for example, and pledging to build a new AI-focused computing center. Other concerns, like China’s ongoing access to ARM IP and how that might change if Nvidia buys ARM from Softbank, are beyond the GPU manufacturer’s control.
Rumors abound that more companies may explore the RISC-V option if Nvidia is allowed to buy ARM, so we might see increased interest in that ISA depending on how all this plays out. The CPU market has become startlingly dynamic for a field largely viewed as moribund just a few years ago. The UK intervention requires an investigation into whether the Nvidia-ARM deal is indeed a threat to the United Kingdom’s national security, with the report due by July 31, 2021.
Now Read:
0 Commentaires