UK Regulator Urged To Block Nvidia’s Arm Acquisition By Microsoft-Backed Graphcore

Nvidia’s $40 billion acquisition of Arm Holdings has been objected by Microsoft-backed Graphcore, according ot reports quoting a crucial member of the British chipmaker’s early development.

Graphcore has opposed the deal in a “major submission” to the U.K.’s Competition and Markets Authority, said Hermann Hauser, who had helped to create Arm in 1990, in a television interview.

“If Nvidia can merge the Arm and Nvidia designs in the same software then that locks out companies like Graphcore from entering the seller market and entering a close relationship with Arm,” said Hauser, who is an investor in Graphcore through his venture capital firm Amadeus Capital.

The deal was described as being a “pro-competitive” one by a spokesperson for Nvidia, which is planning to acquire Arm from its current owner the Japanese tech giant SoftBank.

No comment on the issue was available from Arm, Graphcore and the CMA.

Graphcore views the deal as anti-competitive, the company’s CEO Nigel Toon had said in December last year.

“It risks closing down or limiting other companies’ access to leading edge CPU processor designs which are so important across the technology world, from data centers, to mobile, to cars and in embedded devices of every kind,” he had said.

A computing company called Acorn Computers, which Hauser co-founded in Cambridge, United Kingdom, in 1978, was the mother company of Arm. A critical role in the development of the first Arm processor, which was originally developed as part of Acorn, was played by Hauser.

Arm earns revenues by licensing its chip designs to more than 500 companies and chip makers around the world. The company was described by Hauser as the “Switzerland of the semiconductor industry” since it is very “even-handed” in the manner in which it handles its licensing with its clients.

95 per cent of the smartphones of the world and 95 per cent of the chips designed in China makes use of Arm’s energy-efficient chip architectures. But if Arm is acquired by Nvidia, it will completely destroy the business model of Arm by closing off access to the company’s chip designs, said a concerned Hauser.

Arm’s open license model will be maintained by it, insisted a spokesperson for Nvidia. “Arm CPUs (central processing units) will continue to work with all peripherals and accelerators, just as they do now, and customers will be able to integrate Arm designs with their own accelerators, just as they can today,” they said. “We’re confident that regulators will see the benefits to the entire tech ecosystem.”

There is lack of honesty on the part of Hauser with respect to keeping its promises about maintaining Arm’s business model, he claimed.

“We are discussing our plans with the U.K. government, and we are very happy to put legally binding agreements behind all our commitments,” an Nvidia spokesperson said.

“If you think about the situation Nvidia is in, Nvidia is the one company that would profit from spending $40 billion on destroying a company,” said Hauser, who no longer has any shares in Arm.

(Adapted from TheTelegraph.co.uk)

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