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No, no, no. Government should not be in the business of picking winners and losers and this is more about denying someone else that benefiting the whole. Oh its

No, no, no. Government should not be in the business of picking winners and losers and this is more about denying someone else that benefiting the whole. Oh its wrapped up in pretty paper with a ribbon on it but the true reason is they don't want "those people" to have it. (being Nvidia but I am certain there are a few more suitors they don't like either)

klelatti 6y ago
I'm not generally in favour of government picking winners but this is an exceptional case where keeping ARM independent really would 'benefit the whole'. The argument against Nvidia buying is that they are likely boost their own business at the expense of ARM and the wider ecosystem. It seems perfectly valid for the UK government to step in to protect its most successful technology firm.
- znpy 6y ago
  > I'm not generally in favour of government picking winners tHe MaRkEt WiLl ReGuLaTe ItSeLf!!!
  - klelatti 6y ago
    Effective regulation != Taking large equity stakes
- valuearb 6y ago
  Valid for what reason? There is no evidence ARM would be anymore successful under UK control then nVidias, in fact the opposite maybe true. The history of government owned businesses, esp. in UK is desultory.
  - klelatti 6y ago
    Because Nvidia will find a way to use ARM to strongly favour its own SoCs at the expense of everyone else’s - that’s why it would pay $32bn. That’s not good for ARM or the UK (or for everyone else for that matter).
    - valuearb 6y ago
      NVidia isn’t going to intentionally destroy a $32B acquisition to throw that money down the drain. They are likely to fully support every customer, to protect their investment, and fund it do new things strategically important to NVidia. If the UK owns ARM, over time every investment decision they made will be required to benefit the party in charge, it’s supporters and their districts. That will certainly destroy ARM.
      - klelatti 6y ago
        So they invest in Tegra say, turn Tegra into a hugely profitable success story (which would be great) and then the next moment turn to Tegra's biggest competitor who is also using ARM. Will Nvidia owned ARM provide 'full support' to that customer or will they tip the playing field to favour their own products? We would just have to trust Jensun and his successors. I'd rather not have to rely on their sense of fairness. I don't like state ownership either. No one is suggesting that UK govt should buy ARM outright - just that it takes a stake alongside other long term investors so that ARM can remain independent.
        klelatti 6y ago
        On reflection Nvidia actually have a fiduciary duty to their shareholders to favour their own products in this scenario.
        valuearb 6y ago
        ARM isn’t independent if the UK takes a stake. It’s beholden to those politicians, and those politicians are beholden to their key supporters. NVidia will be contractually obligated to support ARM customers. If over time they do a poor job, they just flushed $32B down the drain.this is an imaginary problem that requires zero preemptive government action. It’s like trying to stop someone from buying an expensive car they can afford on the unsupported theory they won’t take care of it.
      - kybernetikos 6y ago
        > NVidia isn’t going to intentionally destroy a $32B acquisition to throw that money down the drain. It's not just an assumption that they will manage their investment poorly (although that wouldn't surprise me), it's what the likely behaviours of other market participants would be if a key supplier was controlled by a competitor.
  - aspaceman 6y ago
    Why does the business need to be successful once it’s government owned?
  - kybernetikos 6y ago
    According to the article, at least Herman Hauser believes that ARM will likely do poorly under nVidias control. I think the idea is that nvidia is a particularly bad owner considering arm's buisness model (for a similar reason that having Nokia as the main Symbian participant was a bad idea), rather than that the UK would exert beneficial influence. Indeed, the suggestion is that the UK government invests as part of a group rather than takes a controlling interest.
    - valuearb 6y ago
      How would the UK governments influence be beneficial in any way? The governments influence will be the agenda of individual politicians, who know nothing of chip design or care about it. In the US that’s the type of thinking that’s given us the SLS, an $20B launch system that will cost more than twenty times as much as commercial alternatives, and is required by law to use obsolete 50 year old components from key congressional districts.
      - kybernetikos 6y ago
        I think you're agreeing with me. The suggestion is not that the UK government will exert any influence over them at all, just as the Norweigan sovereign wealth fund doesn't exert management control over the 1.3% of global equities it owns. The point made in the article is that that absence of influence will be better than the negative influence that nvidia would apply.
        valuearb 6y ago
        There is no such thing as absence of influence. Government funding always comes with political influence, and almost always negative. Norwegian sovereign fund is an investment fund that holds a tiny fraction of each public companies stock in its fund. For the UK to engineer a purchase of ARM would require raising $32B, offering to kick in 1.3% would go nowhere. Anyone with 99% of $32B doesn’t need the UK. An alternate deal is only possible if the UK offered to kick in a large part, probably at least $10B, and taking a large minority stake. At that level they’d have to have significant influence, or the politicians who engineer it will get run right out of office. What if the new owner moves R&D from the UK?

klelatti 6y ago

I'm not generally in favour of government picking winners but this is an exceptional case where keeping ARM independent really would 'benefit the whole'. The argument against Nvidia buying is that they are likely boost their own business at the expense of ARM and the wider ecosystem. It seems perfectly valid for the UK government to step in to protect its most successful technology firm.

znpy 6y ago
> I'm not generally in favour of government picking winners tHe MaRkEt WiLl ReGuLaTe ItSeLf!!!
- klelatti 6y ago
  Effective regulation != Taking large equity stakes
valuearb 6y ago
Valid for what reason? There is no evidence ARM would be anymore successful under UK control then nVidias, in fact the opposite maybe true. The history of government owned businesses, esp. in UK is desultory.
- klelatti 6y ago
  Because Nvidia will find a way to use ARM to strongly favour its own SoCs at the expense of everyone else’s - that’s why it would pay $32bn. That’s not good for ARM or the UK (or for everyone else for that matter).
  - valuearb 6y ago
    NVidia isn’t going to intentionally destroy a $32B acquisition to throw that money down the drain. They are likely to fully support every customer, to protect their investment, and fund it do new things strategically important to NVidia. If the UK owns ARM, over time every investment decision they made will be required to benefit the party in charge, it’s supporters and their districts. That will certainly destroy ARM.
    - klelatti 6y ago
      So they invest in Tegra say, turn Tegra into a hugely profitable success story (which would be great) and then the next moment turn to Tegra's biggest competitor who is also using ARM. Will Nvidia owned ARM provide 'full support' to that customer or will they tip the playing field to favour their own products? We would just have to trust Jensun and his successors. I'd rather not have to rely on their sense of fairness. I don't like state ownership either. No one is suggesting that UK govt should buy ARM outright - just that it takes a stake alongside other long term investors so that ARM can remain independent.
      - klelatti 6y ago
        On reflection Nvidia actually have a fiduciary duty to their shareholders to favour their own products in this scenario.
      - valuearb 6y ago
        ARM isn’t independent if the UK takes a stake. It’s beholden to those politicians, and those politicians are beholden to their key supporters. NVidia will be contractually obligated to support ARM customers. If over time they do a poor job, they just flushed $32B down the drain.this is an imaginary problem that requires zero preemptive government action. It’s like trying to stop someone from buying an expensive car they can afford on the unsupported theory they won’t take care of it.
    - kybernetikos 6y ago
      > NVidia isn’t going to intentionally destroy a $32B acquisition to throw that money down the drain. It's not just an assumption that they will manage their investment poorly (although that wouldn't surprise me), it's what the likely behaviours of other market participants would be if a key supplier was controlled by a competitor.
- aspaceman 6y ago
  Why does the business need to be successful once it’s government owned?
- kybernetikos 6y ago
  According to the article, at least Herman Hauser believes that ARM will likely do poorly under nVidias control. I think the idea is that nvidia is a particularly bad owner considering arm's buisness model (for a similar reason that having Nokia as the main Symbian participant was a bad idea), rather than that the UK would exert beneficial influence. Indeed, the suggestion is that the UK government invests as part of a group rather than takes a controlling interest.
  - valuearb 6y ago
    How would the UK governments influence be beneficial in any way? The governments influence will be the agenda of individual politicians, who know nothing of chip design or care about it. In the US that’s the type of thinking that’s given us the SLS, an $20B launch system that will cost more than twenty times as much as commercial alternatives, and is required by law to use obsolete 50 year old components from key congressional districts.
    - kybernetikos 6y ago
      I think you're agreeing with me. The suggestion is not that the UK government will exert any influence over them at all, just as the Norweigan sovereign wealth fund doesn't exert management control over the 1.3% of global equities it owns. The point made in the article is that that absence of influence will be better than the negative influence that nvidia would apply.
      - valuearb 6y ago
        There is no such thing as absence of influence. Government funding always comes with political influence, and almost always negative. Norwegian sovereign fund is an investment fund that holds a tiny fraction of each public companies stock in its fund. For the UK to engineer a purchase of ARM would require raising $32B, offering to kick in 1.3% would go nowhere. Anyone with 99% of $32B doesn’t need the UK. An alternate deal is only possible if the UK offered to kick in a large part, probably at least $10B, and taking a large minority stake. At that level they’d have to have significant influence, or the politicians who engineer it will get run right out of office. What if the new owner moves R&D from the UK?