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When Masayoshi Son, the billionaire founder and chief executive of Japan’s Softbank, announced he was buying U.K. computer chip design firm Arm for $32 billion in 2016, the British government was quick to praise the deal as evidence that the country remained an attractive place for foreign investment even though its population had just voted a month earlier to leave the European Union.
But now, four years later, Softbank is selling Arm to U.S. chip giant Nvidia for $40 billion and the U.K. government may not take such a sanguine view of the new ownership arrangements.
When Softbank purchased Arm, the British government forced the Japanese company to commit to a legally-binding set of conditions: these included keeping Arm based in Cambridge, where the company was already in the process of constructing a new signature headquarters building, and critically, doubling Arm’s U.K. headcount to 3,500 employees within five years.
The company, which now employs close to 3,000 people in the U.K., remains shy of that goal. And this time, Jensen Huang, Nvidia’s chief executive, has scrupulously avoided making a firm numerical commitment to further hiring.
“We want more great engineers not fewer,” he said on Monday, without mentioning how many more engineers his company may hire.
Instead, Huang offered vaguer assurances that Nvidia will invest in an artificial intelligence research center in Cambridge, including building one of the world’s most powerful supercomputers there.
“We are open-minded to talk to the U.K. government on a partnership that enables us to invest in the U.K. and expand the R&D presence of Arm,” he said.
Some analysts were skeptical of Jensen’s assurances. “This remains to be seen,” Gartner analyst Alan Priestley said. “Nvidia already has a major investment in its U.S.-based locations for A.I. research.”
One of Arm’s original co-founders, the venture capitalist Hermann Hauser, said he was dismayed at Arm’s sale. “I think it’s an absolute disaster for Cambridge, the U.K., and Europe,” Hauser told the BBC’s Radio 4 on Monday morning.
Hauser said he worried Nvidia, which is based in Santa Clara, Calif., will ultimately shift Arm’s headquarters to the U.S. More importantly, he said Nvidia would destroy’s Arms business model, which has depended on its independence —the company licenses its designs to many chipmakers and as well as companies that incorporate their own chip designs into products, such as Apple and Samsung. All these companies compete with one another. Now Arm is being acquired by one of those competitors, which may use its position to hike licensing and royalty fees on its rivals or to deny them access to the latest technology. Huang said Nvidia valued Arm’s independence and business model.
Hauser also said he worried about Nvidia’s acquisition by a U.S. company amid growing conflict between Washington and Beijing over access to next generation technology. He said Nvidia’s purchase would make it …read more