15 ms·

Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

393 points by marc__1 6y ago

FpUser 6y ago
I think when country allows sale of any company that owns vital technology / IP / etc it plays to a detriment of their own citizens for the sake of filling owner's pockets. So good for UK for trying to protect it disregarding true motives.
Zenst 6y ago
Times like this I lament what Inmos could of been had the UK not just chucked it away as it did.
- samgd 6y ago
  Inmos has directly and indirectly led to many British companies, including Graphcore: https://www.economist.com/britain/2011/08/06/how-the-west-was-won https://www.economist.com/britain/2011/08/06/how-the-west-wa... https://www.wired.co.uk/article/graphcore-ai-intelligence-processing-unit https://www.wired.co.uk/article/graphcore-ai-intelligence-pr...
bencollier49 6y ago
They blatantly ought to have done this for the original sale. Better late than never, I suppose.
- jonplackett 6y ago
  They were too scared of looking 'closed for business' in the middle of the disaster that was/is Brexit.
  - mhh__ 6y ago
    It's the ditch that keeps on giving. I think we are on transition slogan number 3, quite the compensation to being cut off from your customers for many businesses I'm sure. Edit: Is the HN hive telling me Brexit is a good thing then?
  - deleted 6y ago
    [deleted]
  - tokyojoe 6y ago
    You might be right here.
  - thu2111 6y ago
    Brexit only fully happened a few months ago, so it is hardly related to this. Any considerations w.r.t. looking 'open for business' would certainly still apply. But sure, make everything about Brexit, why not.
    - SirHound 6y ago
      That's true, consequences of actions are only ever felt within a very limited timeframe.
    - Twirrim 6y ago
      Brexit took close to 5 years from vote to implementation, during which there was lots of noise from all sides. The Softbank deal came after the Brexit vote, once the Sterling had dropped sufficiently (~30%) to make it additionally enticing. Among articles from the time, https://www.forbes.com/sites/parmyolson/2016/07/18/arm-softbank-bargain-britain/?sh=140961ef3bc1 https://www.forbes.com/sites/parmyolson/2016/07/18/arm-softb..., complete with government spin. It's hard not to make something about Brexit, when the government explicitly chose to make the thing about Brexit. The Softbank deal was disastrous for UK tech, and if the government really was interested in national security grounds (which is what they're claiming this time around), it would have intervened in that deal. NVIDIA isn't likely much more of a risk from a national security perspective than SoftBank. But it had to sell Brexit, and a massive foreign investment in a UK company was an opportunity for spin too enticing to give up.
    - rcxdude 6y ago
      The full legal consequences of brexit have still not fully come into force yet (there are various grace periods still to elapse: the most recent was the start of this month and there is still another extended to 1st October). And the secondary effects will likely take years to become apparent.
- mrweasel 6y ago
  I understand objecting, but for security reasons? A better argument would be that Nvidia gains serious power over companies who are currently ARM customer and Nvidia competitors. Perhaps the UK want to be able to use ARM designs for domestic chips in the future, without being dependent on an American company, but yeah, then they should have objected when a Japanese company bought ARM as well.
  - throwaway3699 6y ago
    Not only that, but I'd be surprised if the military didn't make heavy use of Nvidia cards for ML workloads, CAD design or god knows what. I could definitely see a way to frame this as a security threat if either company were to stop selling to them.
  - ericmay 6y ago
    > but for security reasons? Seems to be the strongest/easiest route to go to justify blocking it. The whole national security angle and all. > then they should have objected when a Japanese company bought ARM as well I have to imagine this was a bit of sleeping at the wheel. I'm not sure though.
    - tester34 6y ago
      >Seems to be the strongest/easiest route to go to justify blocking it. The whole national security angle and all. What makes you think so? So Intel - US / TSMC - Taiwan can be considered as national security, but ARM not?
      - ericmay 6y ago
        Could you elaborate? I guess my thinking is similar to if someone wanted to try and buy Intel. The U.S. would probably stop it on national security grounds. I hope that makes sense - at least where I was trying to go with that comment. Maybe it's incorrect or not well thought out but I'd at least like to make my point clear :)
        6y ago
- mytailorisrich 6y ago
  The only thing it currently means is that the CMA will investigate and prepare a report. On the face of it the difference with Softbank is that Nvidia is a big semiconductors player and thus that this acquisition can have a material impact on competition in the industry and the UK, which was not the case with Softbank. In addition, since the UK is now "properly independent" the government is probably keen to show it by doing what the US and EU competition regulators do.
- Mindwipe 6y ago
  I'm not sure late is better than never in this case. The horse has literally bolted. Shutting the door now does literally nothing other than show you cocked up by not locking it in the first place.
- cma 6y ago
  How are there security reasons when their foreign licencees already get complete and modifiable designs? It's only an IP protection at that point enforceable through friendly relations, not anything immune to adversaries. I can see all the anti-competitive concerns though.
- skywal_l 6y ago
  But what are the consequences exactly? The deal will be stopped and ARM still belongs to a foreign company. Why not follow this to its logical conclusion and nationalize ARM if it is so important? You can't prevent someone to sell something if it doesn't want to keep it.
jack_riminton 6y ago
Does this infer that only a UK based company can buy them from now on? How would this affect their share price if they'd go public?
- marc__1 6y ago
  Public-traded companies are independent, so no merger or consolidation applies. Here is what the U.K. regulatory body defines a 'relevant merger' (regardless if U.K. or internationally-based): the creation of a relevant merger situation as defined in section 23 of the Enterprise Act 2002 (“the Act”), in that: (a) two or more enterprises will cease to be distinct; (b) in the course of the enterprises ceasing to be distinct, a person or group of persons will bring a relevant enterprise (as defined in section 23A of the Act) under their ownership or control; and (c) the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £1 million.
- DerDangDerDang 6y ago
  No. It just means Nvidia need to give some kickbacks to the fantastically corrupt ruling party. Really hard to see this as anything other than a shakedown attempt by people who don’t understand that you can’t keep an ip licensing company inside national borders for long.
  - lucian1900 6y ago
    You may be right about the reason. Or maybe it’s something to do with positioning between US and EU. The correct move would be to nationalise ARM and build a fab, but the Tories are very unlikely to do that.
    - verall 6y ago
      Because even if it was successful from a national security standpoint (semicon independence) it would look like a total boondoggle. It would cost billions of government money, and then overrun those billions in cost. Chips would still be slower than their competitors, and the new British fabbed chips would be even slower. No matter which party pulled the trigger, the other would ruthlessly tear the project down in the eyes of the public as corrupt and expensive, terrible for the environment, huge water and land usage, etc. I'm not trying to say that ARM is incompetent, but it takes years for an institution to learn how to do this. ARM doesn't currently operate fabs.
chrisseaton 6y ago
I guess governments are suddenly much more interested in keeping key industries on-shore. I believe HMG didn't do anything to stop Astra-Zeneca being sold out of the UK a few years ago, and it's just luck it didn't go through. They probably see the need now.
- hcho 6y ago
  It has to be said the current HMG is radically different than the previous one.
  - NegativeLatency 6y ago
    What does HMG stand for?
    - bregma 6y ago
      Her Majesty's Government?
  - cbzbc 6y ago
    Largely in tone only.
bassdropvroom 6y ago
Can anyone more knowledge than me on these matters explain what this means as far as what the UK can and might do? Also, what has the UK done historically when it has invoked powers set out by this Act?
- thu2111 6y ago
  It appears that at the moment all this means is there will be an investigation and a report. Presumably, any action taken to block the sale will have to wait until after that.
wAYshzRtw 6y ago
> Under the powers set out in the Enterprise Act 2002, the Secretary of State for Digital, Culture, Media and Sport is able to intervene on national security grounds. > The Competition and Markets Authority (CMA) will prepare a report on the competition and national security aspects of the proposed transaction. So it's being framed as a national security threat, interesting.
- toxik 6y ago
  This is actually a fairly common way to justify protectionist and interventionist policy. It's "think of the children" in a new disguise, really. But such is policy making. You have to justify your policy with what is popular, not with the truth. For example: lax covid restrictions justified because we can't be sure it'll work, vs. because we know that it'll hurt the economy.
  - ajdlinux 6y ago
    And in the case of issues that could touch on foreign trade or investment treaties, you may have to justify your policy using certain exceptions such as "national security".
  - wAYshzRtw 6y ago
    Makes sense. I think it's going to be a lot more difficult for Nvidia to argue against this, rather than if the intervention had been about competition or something.
  - bun_at_work 6y ago
    I agree with your view on political rhetoric, however, that doesn't mean these things aren't issues of national security. Having access to the fastest chips is a matter of national security, at least for the US. The AI race (even if it's just faster NN processing) has massive implications for modern warfare and national security.
- eptcyka 6y ago
  It'll be interesting to see how they can justify Nvidia's ownership of ARM a security threat, whilst ARM being owned by a Japanese investment bank being _just fine_. What's the difference?
toyg 6y ago
“On national security grounds”...? Why would NVidia, a US corp, be more of a security problem than a Japanese one? If it’s just a matter of commercial overreliance on a single supplier, I find the “National security” bit to be somewhat specious.
- wAYshzRtw 6y ago
  Because the nature of this acquisition is completely different. SoftBank left Arm mostly alone; i.e. brand survived, all offices survived, etc. If this deal goes through, Arm will get fully integrated into Nvidia. There won't be an "Arm" anymore.
  - deleted 6y ago
    [deleted]
  - bserge 6y ago
    Is that how it would be? So, like AMD and ATi? Damn, that's kind of sad.
    - michaelt 6y ago
      Who can say? But the British government has experience, from the Kraft purchase of Cadbury, that even if the buyers promise to keep jobs in the UK and product quality high, once the deal goes through they can renege on those promises instantly with no negative consequences.
      - toyg 6y ago
        I reckon all Western countries have gone through some sort of experience of this. Corporations will do the deal, reap the rewards, and next week or next year they’ll just do as they please - because the concept of honour is too human to be expected of an artificial construct.
      - ClumsyPilot 6y ago
        Shouod make them sign a EULA styke agrement where you could loose what you bought at any time without getting your money or data back.
jarym 6y ago
Well someone woke up while sleeping at the wheel. My concern is that The Competition and Markets Authority (CMA) has no real business to be evaluating national security issues.
klelatti 6y ago
I've been struggling to understand why Nvidia's takeover of Arm might be a UK national security issue (the competition case is quite clear but separate). I'm guessing though that Arm collaborates with UK intelligence agencies and that that collaboration might be jeopardised with the Nvidia takeover (in a way that it was not with the Softbank takeover). Does anyone have any further insights?
- sgt101 6y ago
  I think it's a national capability to do things move - probably sharpened by the realization (in the middle of the pandemic) that not everyone was a friend of the UK and would quite happily watch us drown while sitting round singing songs about how many lifebelts they had.
  - klelatti 6y ago
    I'm sceptical about that - we don't own much technology IP and we're hugely reliant on the US already. I think it's a much more specific security issue.
    - cmrdporcupine 6y ago
      Being dependent on the US turns out to be not a great strategic scenario in this decade. (Speaking as a Canadian who has watched 30 years of continental economic integration and heard lots of friendly talk since the campaign for the 1988 Free Trade Agreement but now back of the line waiting for vaccines imported from Europe because the US won't export to us and our domestic manufacturing was sold off decades ago because of said continental integration.) Also the US itself has used the "national security" excuse for trade issues multiple times over the last few years where it was seemingly not the case (steel & aluminum trade disputes, etc). So the precedent has been set. And there's little sign of Biden really doing much to reverse that.
      - outside1234 6y ago
        Well, ok, but if you are going to go that route you also have to note that the US pays for your national defense as well to be balanced. That said, what Trump pulled with steel and aluminum is BS.
DrBazza 6y ago
Seems a bit like closing the stable door after the horse has bolted. This should have happened when Softbank came around. 'National security grounds' is interesting. It could simply be that the UK is no longer part of the EU and this is belatedly considered a strategic national asset (i.e. a foot in the game of chip design), vs. GCHQ and ARM working together somehow.
fxj 6y ago
To me this seems to be a reaction to the announcement of nvidia to build a one-in-all HPC system. Nvidia already owns Mellanox for the Infiniband Network and their GPUs are the fastest on the market. Now with an additional CPU in their portfolio they could provide a complete Supercomputer in one piece. Think about a HPC-SOC. Supercomputers are still a matter of national security. https://www.nextplatform.com/2021/04/12/nvidia-enters-the-arms-race-with-homegrown-grace-cpus/ https://www.nextplatform.com/2021/04/12/nvidia-enters-the-ar... Also nvidia will build a new system in switzerland with 20 Exaflops (albeit fp16) which would be the fastest ML/AI system so far. https://www.marktechpost.com/2021/04/16/nvidias-novel-cpu-grace-will-power-the-worlds-most-powerful-ai-capable-supercomputer/ https://www.marktechpost.com/2021/04/16/nvidias-novel-cpu-gr... FTA: With the help of tight coupling between NVIDIA CPUs and GPUs, Alps is expected to train GPT-3, the world’s largest natural language processing model, in mere two days.
- klelatti 6y ago
  Not clear why US should be concerned about the sale to a US company?
Guthur 6y ago
I'm somewhat surprised by HNs support of this. I can see a future where Nvidia buys ARM, becomes more hostile to licensees, and the door is left open for something like RISC-V to gain more market relevance.
- deleted 6y ago
  [deleted]
CivBase 6y ago
I don't know near enough about Nvidia or ARM as organizations to justify why I don't like this purchase. I just see two big names being consolidated yet again and I don't like it. Even when the buyer isn't directly competing with the organization they're acquiring, they could be.
skelter 6y ago
The semiconductor supply chain is now almost completely disaggregated ie everyone specialises in just a small part of the value chain. ARM’s speciality is in CPU design and it has carved out for itself the enviable position of being the defacto standard for mobile applications - almost every single phone on the planet has ARM processor(s) running it. And their products are in dozens of other end applications segments as well. These chips are embedded in System on Chip IC’s and manufactured by third party companies like TSMC and UMC etc to end customer specifications, like Apple or Samsung for example. The problem with the original SoftBank deal, and now the Nvidia deal, is that these companies will simply hollow ARM out (slash R&D, cut staff etc) to pump up the target’s value, before flogging it off or breaking it up. The stock market doesn’t value synergies, although it is quite happy to punt this aspect when M&A deals are in the offing. Given its strategic position as the defacto standard for mobile comms, that’s a serious threat. ARM also gives the UK strategic leverage in any trade negotiations. Would we knowingly allow Rolls-Royce Jet Engines to be flogged off? No. Ditto ARM. So, I think this is the right policy and hopefully the government will see fit to step into other deals like this and block them. I’ve been through a PE acquisition. We were stripped bare and bits sold off before finally getting our mojo back. I benefited handsomely but we were not the company we were before and the job losses in the process were huge. It will be no different with Nvidia’s proposed take over of ARM. (disclaimer: I was a semiconductor executive in a global MNC).
tokyojoe 6y ago
The semiconductor supply chain is now almost completely disaggregated ie everyone specialises in just a small part of the value chain. ARM’s speciality is in CPU design and it has carved out for itself the enviable position of being the defacto standard for mobile applications - almost every single phone on the planet has ARM processor(s) running it. And their products are in dozens of other end applications segments as well. These chips are embedded in System on Chip IC’s and manufactured by third party companies like TSMC and UMC etc to end customer specifications, like Apple or Samsung for example. The problem with the original SoftBank deal, and now the Nvidia deal, is that these companies will simply hollow ARM out (slash R&D, cut staff etc) to pump up the target’s value, before flogging it off or breaking it up. The stock market doesn’t value synergies, although it is quite happy to punt this aspect when M&A deals are in the offing. Given its strategic position as the defacto standard for mobile comms, that’s a serious threat. ARM also gives the UK strategic leverage in any trade negotiations. Would we knowingly allow Rolls-Royce Jet Engines to be flogged off? No. Ditto ARM. So, I think this is the right policy and hopefully the government will see fit to step into other deals like this and block them. I’ve been through a PE acquisition. We were stripped bare and bits sold off before finally getting our mojo back. I benefited handsomely but we were not the company we were before and the job losses in the process were huge. It will be no different with Nvidia’s proposed take over of ARM. (disclaimer: I was a semiconductor executive in a global MNC).
- the_duke 6y ago
  You apparently double-posted? https://news.ycombinator.com/item?id=26862687 https://news.ycombinator.com/item?id=26862687
  - tokyojoe 6y ago
    Yeah. Looks like that. :)
    - discreteevent 6y ago
      Somehow, tokyojoe, I find it hard to picture you, as a former semiconductor executive, making two new accounts on HN to post the same thing twice. It's just not the kind of thing I imagine former semiconductor executives spend their days at.
tumblewit 6y ago
Is it possible that Apple is calling their chips Apple Silicon for reasons other than marketing? Since Apple now plans to design and manufacture chips for all their products it’s also possible Apple comes up with an ARM compatible instruction set rather than ARM instruction set to avoid any issues with ARM being part of such takeovers. Just a wild theory since no one has yet (probably legal reasons) done a deep dive into the M1 processor.
- 310260 6y ago
  I would say no if only because it's easier to find talent that understands ARM than it is to teach talent about the nuances of your own single-platform instruction set.
  - capableweb 6y ago
    I think that argument would apply in a lot of places but most likely it wouldn't apply in Apple that are famous for their "not invented here" attitude across the company.
- hilios 6y ago
  There can be no such thing as an ARM compatible instruction set that is not an ARM instruction set. Either it supports the necessary instructions then it is an ARM instruction (possibly super)set or it doesn't then it's incompatible.
- m463 6y ago
  Apple was one of the founders of ARM.
LatteLazy 6y ago
In totally unreleated news negotiations between NVidia and the PMs wife to buy a small shed for £100m have fallen through...
the_duke 6y ago
An interesting side aspect, assuming this is final: Before the Arm acquisition materialized, Nvidia was quite present in the RISC-V space. All current Nvidia cards have at least one RISC-V chip on it. So while their intended high performance use cases are not feasible yet, this could lead to Nvidia focusing on RISC-V again the medium term, which would definitely be beneficial. Of course Nvidia can still pursue ARM based designs without owning the company.
- Symmetry 6y ago
  I don't think it's a matter of one or the other but rather using different ISAs for different things. All the RISC-V use by NVidia seems to have been in microcontrollers and all the recent ARM use has been in application cores.
- deleted 6y ago
  [deleted]
commentonmips9 6y ago
after the loss of MIPS to the chinese communist state enterprises, it is worth being more careful about ARM ownership passing hands too much
Woodi 6y ago
I hope correct timeline here: - EU drops plans to license ARM and start to obviously fail to buid their own arch - Softbank announces it want to get rid of ARM - Nvidia want, UK agree - Apple announces M1 - Nvidia announces Grace - LG drop making phones - China announces cpu independence - UK oh noes, our treasure ! - suddenly "own" arch is good ? LOL If it is just money for Nvidia deal need to be preserved. But Apple and Nvidia are Intel killers now and noone saw potential in ARM ? More likely ARM wanted to ditch UK. Or rather top managers was talking with US buyers earlier... Like Altavista execs moved to Google after headshotting own company. Anyway, whatever - let just x86 die. And pleas, pleas kill MS Windows too !! There is astonishing amount of money behind this madness. Not to mention "spyware" element in both.
- jedimastert 6y ago
  What are the "spyware" elements you refer to in x86?
  - astrange 6y ago
    Not especially accurate reference to Intel ME / AMD PSP.
finikytou 6y ago
ARM is a strategic company and unique in europe. it is UK crown jewel. Selling it to Nvidia is like USA selling Google to Huawei.
- seniorivn 6y ago
  you should've used european company instead of huawei, with huawei you turn it into political and even ideological debate
  - finikytou 6y ago
    I dont see huawei as ideologically worse than google.
- _-david-_ 6y ago
  ARM was already sold to Softbank, a Japanese company. I don't think being American vs Japanese changes the European identity of the company,
  - finikytou 6y ago
    softbank is not a chipmaker and they don't understand what they have. just look at wework. NVIDIA however clearly know that ARM represent market domination and would be a national strategic asset.
CalChris 6y ago
This objection should have been raised for the original sale. However, the owners then made bank on that sale and those owners also presumably had better political leverage then. Read that as Brits sell crown jewels for coin to foreigners. Foreigners re-sell crown jewels but UK discovers public interest and raises objection to crown jewels being sold. It's a bit late.
nabla9 6y ago
ARM deal has a condition: > The proposed transaction is subject to customary closing conditions, including the receipt of regulatory approvals for the U.K., China, the European Union and the United States. Completion of the transaction is expected to take place in approximately 18 months. Any one of these 4 regulators can still stop the sale.
- nottorp 6y ago
  Oh pretty. I don't see China - which is already under some embargos by the US - allowing ARM to become an US company.
- LatteLazy 6y ago
  I'm confused why China get a say? ARM is UK, Softbank is Japan and Nvidia is US, why do the Chinese have a claim? Is it just because no one wants to upset them?
  - nabla9 6y ago
    Nvidia gets more revenue from China+HK than they get from the US. China is huge market for both ARM and Nvidia. Nvidia don't want to buy a company if they can't sell to Chinese market.
    - LatteLazy 6y ago
      Fair enough. I didn't realise China were such a big market for them. Thanks!
abrowne 6y ago
Interesting that they mention a lot of prices with a dollar sign without specifying the currency or converting any of the amounts to GBP.
adam 6y ago
There's a forecast question on Foretell (a crowd forecasting site run by a think tank at Georgetown) about the likelihood of a successful acquisition if anyone is interested. Current crowd consensus is 41% likelihood, down 2% in the last day: https://www.cset-foretell.com/questions/102-will-nvidia-acquire-arm-by-march-30-2022 https://www.cset-foretell.com/questions/102-will-nvidia-acqu...
mrtweetyhack 6y ago
Honestly, the UK should buy it and keep it UK. Too valuable to sell.

393 points by marc__1 6y ago

I think when country allows sale of any company that owns vital technology / IP / etc it plays to a detriment of their own citizens for the sake of filling owner's pockets. So good for UK for trying to protect it disregarding true motives.

Zenst 6y ago

Times like this I lament what Inmos could of been had the UK not just chucked it away as it did.

samgd 6y ago
Inmos has directly and indirectly led to many British companies, including Graphcore: https://www.economist.com/britain/2011/08/06/how-the-west-was-won https://www.economist.com/britain/2011/08/06/how-the-west-wa... https://www.wired.co.uk/article/graphcore-ai-intelligence-processing-unit https://www.wired.co.uk/article/graphcore-ai-intelligence-pr...

bencollier49 6y ago

They blatantly ought to have done this for the original sale. Better late than never, I suppose.

jonplackett 6y ago
They were too scared of looking 'closed for business' in the middle of the disaster that was/is Brexit.
- mhh__ 6y ago
  It's the ditch that keeps on giving. I think we are on transition slogan number 3, quite the compensation to being cut off from your customers for many businesses I'm sure. Edit: Is the HN hive telling me Brexit is a good thing then?
- deleted 6y ago
  [deleted]
- tokyojoe 6y ago
  You might be right here.
- thu2111 6y ago
  Brexit only fully happened a few months ago, so it is hardly related to this. Any considerations w.r.t. looking 'open for business' would certainly still apply. But sure, make everything about Brexit, why not.
  - SirHound 6y ago
    That's true, consequences of actions are only ever felt within a very limited timeframe.
  - Twirrim 6y ago
    Brexit took close to 5 years from vote to implementation, during which there was lots of noise from all sides. The Softbank deal came after the Brexit vote, once the Sterling had dropped sufficiently (~30%) to make it additionally enticing. Among articles from the time, https://www.forbes.com/sites/parmyolson/2016/07/18/arm-softbank-bargain-britain/?sh=140961ef3bc1 https://www.forbes.com/sites/parmyolson/2016/07/18/arm-softb..., complete with government spin. It's hard not to make something about Brexit, when the government explicitly chose to make the thing about Brexit. The Softbank deal was disastrous for UK tech, and if the government really was interested in national security grounds (which is what they're claiming this time around), it would have intervened in that deal. NVIDIA isn't likely much more of a risk from a national security perspective than SoftBank. But it had to sell Brexit, and a massive foreign investment in a UK company was an opportunity for spin too enticing to give up.
  - rcxdude 6y ago
    The full legal consequences of brexit have still not fully come into force yet (there are various grace periods still to elapse: the most recent was the start of this month and there is still another extended to 1st October). And the secondary effects will likely take years to become apparent.
mrweasel 6y ago
I understand objecting, but for security reasons? A better argument would be that Nvidia gains serious power over companies who are currently ARM customer and Nvidia competitors. Perhaps the UK want to be able to use ARM designs for domestic chips in the future, without being dependent on an American company, but yeah, then they should have objected when a Japanese company bought ARM as well.
- throwaway3699 6y ago
  Not only that, but I'd be surprised if the military didn't make heavy use of Nvidia cards for ML workloads, CAD design or god knows what. I could definitely see a way to frame this as a security threat if either company were to stop selling to them.
- ericmay 6y ago
  > but for security reasons? Seems to be the strongest/easiest route to go to justify blocking it. The whole national security angle and all. > then they should have objected when a Japanese company bought ARM as well I have to imagine this was a bit of sleeping at the wheel. I'm not sure though.
  - tester34 6y ago
    >Seems to be the strongest/easiest route to go to justify blocking it. The whole national security angle and all. What makes you think so? So Intel - US / TSMC - Taiwan can be considered as national security, but ARM not?
    - ericmay 6y ago
      Could you elaborate? I guess my thinking is similar to if someone wanted to try and buy Intel. The U.S. would probably stop it on national security grounds. I hope that makes sense - at least where I was trying to go with that comment. Maybe it's incorrect or not well thought out but I'd at least like to make my point clear :)
      - 6y ago
mytailorisrich 6y ago
The only thing it currently means is that the CMA will investigate and prepare a report. On the face of it the difference with Softbank is that Nvidia is a big semiconductors player and thus that this acquisition can have a material impact on competition in the industry and the UK, which was not the case with Softbank. In addition, since the UK is now "properly independent" the government is probably keen to show it by doing what the US and EU competition regulators do.
Mindwipe 6y ago
I'm not sure late is better than never in this case. The horse has literally bolted. Shutting the door now does literally nothing other than show you cocked up by not locking it in the first place.
cma 6y ago
How are there security reasons when their foreign licencees already get complete and modifiable designs? It's only an IP protection at that point enforceable through friendly relations, not anything immune to adversaries. I can see all the anti-competitive concerns though.
skywal_l 6y ago
But what are the consequences exactly? The deal will be stopped and ARM still belongs to a foreign company. Why not follow this to its logical conclusion and nationalize ARM if it is so important? You can't prevent someone to sell something if it doesn't want to keep it.

jack_riminton 6y ago

Does this infer that only a UK based company can buy them from now on? How would this affect their share price if they'd go public?

marc__1 6y ago
Public-traded companies are independent, so no merger or consolidation applies. Here is what the U.K. regulatory body defines a 'relevant merger' (regardless if U.K. or internationally-based): the creation of a relevant merger situation as defined in section 23 of the Enterprise Act 2002 (“the Act”), in that: (a) two or more enterprises will cease to be distinct; (b) in the course of the enterprises ceasing to be distinct, a person or group of persons will bring a relevant enterprise (as defined in section 23A of the Act) under their ownership or control; and (c) the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £1 million.
DerDangDerDang 6y ago
No. It just means Nvidia need to give some kickbacks to the fantastically corrupt ruling party. Really hard to see this as anything other than a shakedown attempt by people who don’t understand that you can’t keep an ip licensing company inside national borders for long.
- lucian1900 6y ago
  You may be right about the reason. Or maybe it’s something to do with positioning between US and EU. The correct move would be to nationalise ARM and build a fab, but the Tories are very unlikely to do that.
  - verall 6y ago
    Because even if it was successful from a national security standpoint (semicon independence) it would look like a total boondoggle. It would cost billions of government money, and then overrun those billions in cost. Chips would still be slower than their competitors, and the new British fabbed chips would be even slower. No matter which party pulled the trigger, the other would ruthlessly tear the project down in the eyes of the public as corrupt and expensive, terrible for the environment, huge water and land usage, etc. I'm not trying to say that ARM is incompetent, but it takes years for an institution to learn how to do this. ARM doesn't currently operate fabs.

chrisseaton 6y ago

I guess governments are suddenly much more interested in keeping key industries on-shore. I believe HMG didn't do anything to stop Astra-Zeneca being sold out of the UK a few years ago, and it's just luck it didn't go through. They probably see the need now.

hcho 6y ago
It has to be said the current HMG is radically different than the previous one.
- NegativeLatency 6y ago
  What does HMG stand for?
  - bregma 6y ago
    Her Majesty's Government?
- cbzbc 6y ago
  Largely in tone only.

bassdropvroom 6y ago

Can anyone more knowledge than me on these matters explain what this means as far as what the UK can and might do? Also, what has the UK done historically when it has invoked powers set out by this Act?

thu2111 6y ago
It appears that at the moment all this means is there will be an investigation and a report. Presumably, any action taken to block the sale will have to wait until after that.

wAYshzRtw 6y ago

> Under the powers set out in the Enterprise Act 2002, the Secretary of State for Digital, Culture, Media and Sport is able to intervene on national security grounds. > The Competition and Markets Authority (CMA) will prepare a report on the competition and national security aspects of the proposed transaction. So it's being framed as a national security threat, interesting.

toxik 6y ago
This is actually a fairly common way to justify protectionist and interventionist policy. It's "think of the children" in a new disguise, really. But such is policy making. You have to justify your policy with what is popular, not with the truth. For example: lax covid restrictions justified because we can't be sure it'll work, vs. because we know that it'll hurt the economy.
- ajdlinux 6y ago
  And in the case of issues that could touch on foreign trade or investment treaties, you may have to justify your policy using certain exceptions such as "national security".
- wAYshzRtw 6y ago
  Makes sense. I think it's going to be a lot more difficult for Nvidia to argue against this, rather than if the intervention had been about competition or something.
- bun_at_work 6y ago
  I agree with your view on political rhetoric, however, that doesn't mean these things aren't issues of national security. Having access to the fastest chips is a matter of national security, at least for the US. The AI race (even if it's just faster NN processing) has massive implications for modern warfare and national security.
eptcyka 6y ago
It'll be interesting to see how they can justify Nvidia's ownership of ARM a security threat, whilst ARM being owned by a Japanese investment bank being _just fine_. What's the difference?

toyg 6y ago

“On national security grounds”...? Why would NVidia, a US corp, be more of a security problem than a Japanese one? If it’s just a matter of commercial overreliance on a single supplier, I find the “National security” bit to be somewhat specious.

wAYshzRtw 6y ago
Because the nature of this acquisition is completely different. SoftBank left Arm mostly alone; i.e. brand survived, all offices survived, etc. If this deal goes through, Arm will get fully integrated into Nvidia. There won't be an "Arm" anymore.
- deleted 6y ago
  [deleted]
- bserge 6y ago
  Is that how it would be? So, like AMD and ATi? Damn, that's kind of sad.
  - michaelt 6y ago
    Who can say? But the British government has experience, from the Kraft purchase of Cadbury, that even if the buyers promise to keep jobs in the UK and product quality high, once the deal goes through they can renege on those promises instantly with no negative consequences.
    - toyg 6y ago
      I reckon all Western countries have gone through some sort of experience of this. Corporations will do the deal, reap the rewards, and next week or next year they’ll just do as they please - because the concept of honour is too human to be expected of an artificial construct.
    - ClumsyPilot 6y ago
      Shouod make them sign a EULA styke agrement where you could loose what you bought at any time without getting your money or data back.

jarym 6y ago

Well someone woke up while sleeping at the wheel. My concern is that The Competition and Markets Authority (CMA) has no real business to be evaluating national security issues.

klelatti 6y ago

I've been struggling to understand why Nvidia's takeover of Arm might be a UK national security issue (the competition case is quite clear but separate). I'm guessing though that Arm collaborates with UK intelligence agencies and that that collaboration might be jeopardised with the Nvidia takeover (in a way that it was not with the Softbank takeover). Does anyone have any further insights?

sgt101 6y ago
I think it's a national capability to do things move - probably sharpened by the realization (in the middle of the pandemic) that not everyone was a friend of the UK and would quite happily watch us drown while sitting round singing songs about how many lifebelts they had.
- klelatti 6y ago
  I'm sceptical about that - we don't own much technology IP and we're hugely reliant on the US already. I think it's a much more specific security issue.
  - cmrdporcupine 6y ago
    Being dependent on the US turns out to be not a great strategic scenario in this decade. (Speaking as a Canadian who has watched 30 years of continental economic integration and heard lots of friendly talk since the campaign for the 1988 Free Trade Agreement but now back of the line waiting for vaccines imported from Europe because the US won't export to us and our domestic manufacturing was sold off decades ago because of said continental integration.) Also the US itself has used the "national security" excuse for trade issues multiple times over the last few years where it was seemingly not the case (steel & aluminum trade disputes, etc). So the precedent has been set. And there's little sign of Biden really doing much to reverse that.
    - outside1234 6y ago
      Well, ok, but if you are going to go that route you also have to note that the US pays for your national defense as well to be balanced. That said, what Trump pulled with steel and aluminum is BS.

DrBazza 6y ago

Seems a bit like closing the stable door after the horse has bolted. This should have happened when Softbank came around. 'National security grounds' is interesting. It could simply be that the UK is no longer part of the EU and this is belatedly considered a strategic national asset (i.e. a foot in the game of chip design), vs. GCHQ and ARM working together somehow.

fxj 6y ago

To me this seems to be a reaction to the announcement of nvidia to build a one-in-all HPC system. Nvidia already owns Mellanox for the Infiniband Network and their GPUs are the fastest on the market. Now with an additional CPU in their portfolio they could provide a complete Supercomputer in one piece. Think about a HPC-SOC. Supercomputers are still a matter of national security. https://www.nextplatform.com/2021/04/12/nvidia-enters-the-arms-race-with-homegrown-grace-cpus/ https://www.nextplatform.com/2021/04/12/nvidia-enters-the-ar... Also nvidia will build a new system in switzerland with 20 Exaflops (albeit fp16) which would be the fastest ML/AI system so far. https://www.marktechpost.com/2021/04/16/nvidias-novel-cpu-grace-will-power-the-worlds-most-powerful-ai-capable-supercomputer/ https://www.marktechpost.com/2021/04/16/nvidias-novel-cpu-gr... FTA: With the help of tight coupling between NVIDIA CPUs and GPUs, Alps is expected to train GPT-3, the world’s largest natural language processing model, in mere two days.

klelatti 6y ago
Not clear why US should be concerned about the sale to a US company?

Guthur 6y ago

I'm somewhat surprised by HNs support of this. I can see a future where Nvidia buys ARM, becomes more hostile to licensees, and the door is left open for something like RISC-V to gain more market relevance.

deleted 6y ago
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CivBase 6y ago

I don't know near enough about Nvidia or ARM as organizations to justify why I don't like this purchase. I just see two big names being consolidated yet again and I don't like it. Even when the buyer isn't directly competing with the organization they're acquiring, they could be.

skelter 6y ago

The semiconductor supply chain is now almost completely disaggregated ie everyone specialises in just a small part of the value chain. ARM’s speciality is in CPU design and it has carved out for itself the enviable position of being the defacto standard for mobile applications - almost every single phone on the planet has ARM processor(s) running it. And their products are in dozens of other end applications segments as well. These chips are embedded in System on Chip IC’s and manufactured by third party companies like TSMC and UMC etc to end customer specifications, like Apple or Samsung for example. The problem with the original SoftBank deal, and now the Nvidia deal, is that these companies will simply hollow ARM out (slash R&D, cut staff etc) to pump up the target’s value, before flogging it off or breaking it up. The stock market doesn’t value synergies, although it is quite happy to punt this aspect when M&A deals are in the offing. Given its strategic position as the defacto standard for mobile comms, that’s a serious threat. ARM also gives the UK strategic leverage in any trade negotiations. Would we knowingly allow Rolls-Royce Jet Engines to be flogged off? No. Ditto ARM. So, I think this is the right policy and hopefully the government will see fit to step into other deals like this and block them. I’ve been through a PE acquisition. We were stripped bare and bits sold off before finally getting our mojo back. I benefited handsomely but we were not the company we were before and the job losses in the process were huge. It will be no different with Nvidia’s proposed take over of ARM. (disclaimer: I was a semiconductor executive in a global MNC).

tokyojoe 6y ago

the_duke 6y ago
You apparently double-posted? https://news.ycombinator.com/item?id=26862687 https://news.ycombinator.com/item?id=26862687
- tokyojoe 6y ago
  Yeah. Looks like that. :)
  - discreteevent 6y ago
    Somehow, tokyojoe, I find it hard to picture you, as a former semiconductor executive, making two new accounts on HN to post the same thing twice. It's just not the kind of thing I imagine former semiconductor executives spend their days at.

tumblewit 6y ago

Is it possible that Apple is calling their chips Apple Silicon for reasons other than marketing? Since Apple now plans to design and manufacture chips for all their products it’s also possible Apple comes up with an ARM compatible instruction set rather than ARM instruction set to avoid any issues with ARM being part of such takeovers. Just a wild theory since no one has yet (probably legal reasons) done a deep dive into the M1 processor.

310260 6y ago
I would say no if only because it's easier to find talent that understands ARM than it is to teach talent about the nuances of your own single-platform instruction set.
- capableweb 6y ago
  I think that argument would apply in a lot of places but most likely it wouldn't apply in Apple that are famous for their "not invented here" attitude across the company.
hilios 6y ago
There can be no such thing as an ARM compatible instruction set that is not an ARM instruction set. Either it supports the necessary instructions then it is an ARM instruction (possibly super)set or it doesn't then it's incompatible.
m463 6y ago
Apple was one of the founders of ARM.

LatteLazy 6y ago

In totally unreleated news negotiations between NVidia and the PMs wife to buy a small shed for £100m have fallen through...

the_duke 6y ago

An interesting side aspect, assuming this is final: Before the Arm acquisition materialized, Nvidia was quite present in the RISC-V space. All current Nvidia cards have at least one RISC-V chip on it. So while their intended high performance use cases are not feasible yet, this could lead to Nvidia focusing on RISC-V again the medium term, which would definitely be beneficial. Of course Nvidia can still pursue ARM based designs without owning the company.

Symmetry 6y ago
I don't think it's a matter of one or the other but rather using different ISAs for different things. All the RISC-V use by NVidia seems to have been in microcontrollers and all the recent ARM use has been in application cores.
deleted 6y ago
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commentonmips9 6y ago

after the loss of MIPS to the chinese communist state enterprises, it is worth being more careful about ARM ownership passing hands too much

Woodi 6y ago

I hope correct timeline here: - EU drops plans to license ARM and start to obviously fail to buid their own arch - Softbank announces it want to get rid of ARM - Nvidia want, UK agree - Apple announces M1 - Nvidia announces Grace - LG drop making phones - China announces cpu independence - UK oh noes, our treasure ! - suddenly "own" arch is good ? LOL If it is just money for Nvidia deal need to be preserved. But Apple and Nvidia are Intel killers now and noone saw potential in ARM ? More likely ARM wanted to ditch UK. Or rather top managers was talking with US buyers earlier... Like Altavista execs moved to Google after headshotting own company. Anyway, whatever - let just x86 die. And pleas, pleas kill MS Windows too !! There is astonishing amount of money behind this madness. Not to mention "spyware" element in both.

jedimastert 6y ago
What are the "spyware" elements you refer to in x86?
- astrange 6y ago
  Not especially accurate reference to Intel ME / AMD PSP.

finikytou 6y ago

ARM is a strategic company and unique in europe. it is UK crown jewel. Selling it to Nvidia is like USA selling Google to Huawei.

seniorivn 6y ago
you should've used european company instead of huawei, with huawei you turn it into political and even ideological debate
- finikytou 6y ago
  I dont see huawei as ideologically worse than google.
_-david-_ 6y ago
ARM was already sold to Softbank, a Japanese company. I don't think being American vs Japanese changes the European identity of the company,
- finikytou 6y ago
  softbank is not a chipmaker and they don't understand what they have. just look at wework. NVIDIA however clearly know that ARM represent market domination and would be a national strategic asset.

CalChris 6y ago

This objection should have been raised for the original sale. However, the owners then made bank on that sale and those owners also presumably had better political leverage then. Read that as Brits sell crown jewels for coin to foreigners. Foreigners re-sell crown jewels but UK discovers public interest and raises objection to crown jewels being sold. It's a bit late.

nabla9 6y ago

ARM deal has a condition: > The proposed transaction is subject to customary closing conditions, including the receipt of regulatory approvals for the U.K., China, the European Union and the United States. Completion of the transaction is expected to take place in approximately 18 months. Any one of these 4 regulators can still stop the sale.

nottorp 6y ago
Oh pretty. I don't see China - which is already under some embargos by the US - allowing ARM to become an US company.
LatteLazy 6y ago
I'm confused why China get a say? ARM is UK, Softbank is Japan and Nvidia is US, why do the Chinese have a claim? Is it just because no one wants to upset them?
- nabla9 6y ago
  Nvidia gets more revenue from China+HK than they get from the US. China is huge market for both ARM and Nvidia. Nvidia don't want to buy a company if they can't sell to Chinese market.
  - LatteLazy 6y ago
    Fair enough. I didn't realise China were such a big market for them. Thanks!

abrowne 6y ago

Interesting that they mention a lot of prices with a dollar sign without specifying the currency or converting any of the amounts to GBP.

adam 6y ago

There's a forecast question on Foretell (a crowd forecasting site run by a think tank at Georgetown) about the likelihood of a successful acquisition if anyone is interested. Current crowd consensus is 41% likelihood, down 2% in the last day: https://www.cset-foretell.com/questions/102-will-nvidia-acquire-arm-by-march-30-2022 https://www.cset-foretell.com/questions/102-will-nvidia-acqu...

mrtweetyhack 6y ago

Honestly, the UK should buy it and keep it UK. Too valuable to sell.