back to article A 'national security' issue: UK.gov blocks Nvidia's Arm deal for now, inserts deeper probe

The UK government has asked the nation's Competition and Markets Authority to do an even deeper dive into Nvidia's $40bn takeover of Arm after initial findings unearthed negative implications for chip design choice. The competition watchdog in July reported on its findings on Phase One of the investigation in which it received …

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  1. hottuberrol

    A government awash with russian donations is concerned about national security. Mmm-kay.

    1. jmch Silver badge

      Whatever the case may be, Nvidia buying Arm is not going to be good for consumers or enterprises.

      1. Jon 37 Silver badge

        In the medium term I agree with you.

        In the longer term, I'm hoping it will encourage a switch to RISC-V, which is a truly open instruction set not owned by any one company. That promotes competition between RISC-V core designers, driving down prices and driving up performance and capabilities. A widespread adoption of RISC-V, replacing ARM, would be good for consumers and enterprises. (Though obviously there are short-term costs of the transition itself).

  2. Martin Gregorie Silver badge

    I've always been mystified why the Government Of The Day ever thought it was a good idea to let Softbank get its mitts on Arm in the first place.

    1. Lusty

      I've always been mystified why people think it's any of the government's business what a company does. If the government wants control then they should pony up for some shares like the rest of us.

      1. Lon24 Silver badge

        Fancy a swim off Whitstable? Or anywhere within Southern Water's reach ...

        We are all, people or companies, subject to regulation. I mean do you think you have an unregulated right to hurt or kill someone with a knife or ecoli?

        That also includes ownership which can vary from managements with a long term interest in the benefit of all stakeholders to short term asset strippers or the sole purpose of putting the competition out of business by other means than out-trading them. It's surely just a case of when regulation becomes self-defeating.

        This block is probably a recognition that if we don't block it the EU was already on the road to doing so.

        1. Anonymous Coward
          Anonymous Coward

          Are you suggesting there are no faecal coliforms, off Whitstable, due to UK government regulation? (Spoiler alert: There are.)

          1. Tomato42

            what he is saying is that if not for government regulations, you wouldn't need to worry about faecal coliforms because the river would be on fire, or worse

        2. Yet Another Anonymous coward Silver badge

          Are you suggesting that the government should interfere in the free markets and stop water companies being sold to foreign enterprises for some sort of spurious "good of the people" / "national interest" reasons ?

          Good God man, this is only drinking water were talking about not something vital like a merchant bank

        3. Lusty

          "Fancy a swim off Whitstable? Or anywhere within Southern Water's reach"

          If you can't tell the difference between making a business decision to sell your company and illegally dumping sewage then there's not much point entering a discussion with you. Obviously a company breaking the law should be held to account, this is not that.

          1. Lon24 Silver badge

            It's only illegal because there is regulation. Only, some would argue, it isn't strong enough if its more profitable for Southern Water to pay the fines rather than amend its business plan.

            Next?

        4. Anonymous Coward
          Anonymous Coward

          Some people seem unable to separate their dislike of this deal (and it is a bad thing) with the issue of government interference. Is this a bad idea? Absolutely. Does this harm competition? No, not really. Will this create a monopoly? Not even close. Will this prevent innovation? Not at all. There are a great many chip designs out there, and a great many companies making and licensing them. I'd be just as upset as the next guy if Arm were sold to NVidia, but I see no reason for government intervention here.

          1. Dinanziame Silver badge

            If it is a bad thing — and you agree that it is a bad thing — then it makes sense for the government to do something against it. New laws are created every day because the government realizes that something bad is happening and something needs to be done about it.

            1. Anonymous Coward
              Anonymous Coward

              No, if we get rid of the free market then we'll be a very different kind of society.

              1. Doctor Syntax Silver badge

                How free does a society remain once monopolists get to work?

                1. Anonymous Coward
                  Anonymous Coward

                  This isn't a monopoly situation, as said above there are plenty of chip designs and manufacturers. Free market means if NVidia screw this up someone else can step up. Architectures come and go, as evidenced by Apple swapping and changing, Linux and Windows supporting multiple architectures easily.

      2. Justthefacts

        What do you think a company actually is?

        I can only assume you are one of those libertarian types under the delusion that a company exists only to serve its shareholders, and that nobody else has a legitimate interest?

        If so, consider this: why would anyone care what the management of a company is? And who the CEO is? If your thesis were true, that companies were run fully in alignment with shareholder interests, then it would of course be irrelevant who did the message-running. And the FT wouldn’t run articles about it. Of course, it *isn’t* true. It’s called the principle-agent problem in economics.

        The shareholders are only one group with a legitimate interest. Management are another. The workforce another. And customers another. There is *no logical reason whatsoever* to prioritise shareholder value over the other three. And in fact, that’s a relatively new view, from the Austrian economists. In the sixties or seventies, even the stockbrokers would have blanched if you said that only shareholder value mattered.

  3. teebie

    "Nadine Dorries has quasi-judicial power"

    Well, that's a sentence that belongs in a loading screen for a Fallout game.

    1. This post has been deleted by a moderator

    2. MyffyW Silver badge

      The only trial that Nadine has shown aptitude for is that conducted in the Australian jungle presided over by Ant and Dec, for which she trousered £20,228 whilst absent from parliament.

      I hope her judgement on company law proves more sound.

      1. Anonymous Coward
        Anonymous Coward

        Careful. Previous post about her jungle bush tucker antics got moderated. It seems the subject is taboo.

  4. Andy The Hat Silver badge

    Can anyone explain ...

    why the UK government has any ultimate power over the sale of a foreign owned company, obviously considered in the past not not to be a financial or security concern to the UK because it was allowed to be sold to that overseas investment group? HM Gov had the legitimate option to control the company before it left UK ownership but currently it isn't a UK company any more than Toyota or The Tokyo Scorchio-Noodle Emporium.

    1. Chris G Silver badge

      Re: Can anyone explain ...

      As far as I know, regardless of who currently owns the company, it is based in and largely operares from the UK.

      That, like any other merger or purchase in the last 40 or 50 years puts it under scrutiny by the UK government.

    2. HAL-9000

      Re: Can anyone explain ...

      https://find-and-update.company-information.service.gov.uk/company/02557590

      It's incorporated/registered in the UK and subject to UK regulation

    3. MOV r0,r0

      Re: Can anyone explain ...

      before it left UK ownership

      UK Gov does indeed have a legit influence because Arm is UK based, it might want to be careful exercising that right to avoid scaring off international capital, but Arm has never been wholly UK owned.

      Robin Saxby has said it was 60% internationally owned when SoftBank bought it. At conception it was 55% US owned (Apple, VLSI) and the remaining 45% (Acorn) was 60% owned by an Italian ex-typewriter slinger anyway. All Arm's start-up finance was from outside the UK as was the core RISC concept.

      Irrespective of ownership Arm always has been and remains a UK based company and it has always been global in outlook but there's never been a time when Arm was wholly UK owned.

      1. Yet Another Anonymous coward Silver badge

        Re: Can anyone explain ...

        >UK Gov does indeed have a legit influence because Arm is UK based

        Currently. Even if the former colonies have no geeks of their own they may be able to persuade some of those in Cambridge that San Francisco is equally cold and windy - albeit with 5x the salary

        1. Mark 65 Silver badge

          Re: Can anyone explain ...

          albeit with 5x the salary

          and 10x the living expenses.

      2. Dan 55 Silver badge
        Happy

        Re: Can anyone explain ...

        it might want to be careful exercising that right to avoid scaring off international capital

        It's a bit late for that now, isn't it?

    4. unimaginative

      Re: Can anyone explain ...

      The authorities in any country the operate in will probe compeition issues: the US and the EU and others are also investigating.

      With regard to national security, I doubt its much of an issue, but the law has changed since it last changed hands.

      Foreign ownership is irrelevant. As others have pointed out its nothing like Toyota as its HQ and most of its operations are in the UK.

    5. katrinab Silver badge

      Re: Can anyone explain ...

      SoftBank was not a big player in the chip business, so no competition concerns. Nvidia is a very big player.

  5. Mishak

    The Department of Culture, Media and Sport (DCMS)

    I've never understood why this comes under the remit of The Department of Culture, Media and Sport?

    1. Pascal Monett Silver badge

      It's the Competition and Markets Authority.

      1. Mishak

        Sure, but that's business and regulation, not culture, media or sport!

        Seems like a very strange mix to have in a department.

        1. Claverhouse Silver badge

          The Department of All-Sorts.

          1. cyberdemon Silver badge
            Big Brother

            Department of Culture, Media and Sport

            AKA the Ministry of Fun.

            NVidia might have too much fun with ARM, and that's not permitted here in Blighty.

            I'm sure Priti Patel will find some Israeli company to sell ARM to instead...

            1. Anonymous Coward
              Anonymous Coward

              Re: Department of Culture, Media and Sport

              And if Priti Patel is involved, she will find some way to make it illegal, too.

    2. Dan 55 Silver badge

      Re: The Department of Culture, Media and Sport (DCMS)

      It's supposed to stand for Digital, Culture, Media, and Sport.

      And chips are digital, innit?

      1. Anonymous Coward
        Anonymous Coward

        Re: The Department of Culture, Media and Sport (DCMS)

        Oh I always thought it was "Digital Culture"! :-o

        1. Dan 55 Silver badge

          Re: The Department of Culture, Media and Sport (DCMS)

          I do like the idea of Nadine Dorries being uniquely positioned to be the final arbiter over key IT and chip technology matters. Very on-brand of the Johnson government.

        2. Doctor Syntax Silver badge

          Re: The Department of Culture, Media and Sport (DCMS)

          I think of it as Culture Media. You can grow very nasty things in culture media.

  6. Anonymous Coward
    Anonymous Coward

    About time

    This should have been a no-brainer, way back when it was first announced. Glad to see someone is awake at the wheel.

    1. Mark 65 Silver badge

      Re: About time

      Awake at the wheel or lobbied hard by a different vested interest?

  7. Howard Sway Silver badge

    "The CMA will now report to me and provide advice on the next steps"

    ... because frankly I don't understand anything about it, and I'm too clueless to be trusted with any responsibility to know what to do next or make any decisions myself...

    1. Yet Another Anonymous coward Silver badge

      Re: "The CMA will now report to me and provide advice on the next steps"

      I assume the ministerial summary is just smiley face / frowny face emoji ?

    2. gerryg

      Re: "The CMA will now report to me and provide advice on the next steps"

      It's what the CMA is there for. The CMA is knee deep in lawyers and economists who can provide robust(ish) advice when challenged by the lawyers and economists the other team will field when the issue arrives in Court.

      Sometimes it might be important to step back from an ad hominem attack and realise that all Ministers, from all governments, all of the time, take advice from their expert advisory bodies.

      1. Yet Another Anonymous coward Silver badge

        Re: "The CMA will now report to me and provide advice on the next steps"

        >all Ministers, from all governments, all of the time, take advice from their expert advisory bodies

        Except presumably the Slithy Gove ?

      2. amanfromMars 1 Silver badge

        A few questions to ask yourself ....*

        Sometimes it might be important to step back from an ad hominem attack and realise that all Ministers, from all governments, all of the time, take advice from their expert advisory bodies. ..... gerryg

        That is as may be, gerryg, but they are not obliged to ensure such expert third party body advice is taken. Many a minister and government has fallen because the brown envelope lure of a golden future handshake and some/as much flash fast cash as it takes was too attractive a proposal to dismiss and deny.

        Haven't you seen/heard the news? Don't you realise yet? Government is political and not social or sociable and politics is ripe rotten and easily prone to corruption and perversion at its every core with vulnerabilities for exploitation also around every edge and via the subversive dark pooled hedges betting against both sides of an argument winning to lose.

        What FUD SNAFUBAR did they pimp/pump and dump on you this week? Was it good? Did you enjoy any of it even just a little bit?

        Or was It's Good News Week a continuing disaster of doom and gloom with increasing depression and rising inflation leading to massive despair and colossal deflationary spirals in out of order market control controlling events?

        * ....How do you like the answers?

  8. HAL-9000

    Hmmmmm

    A quick browse through the comments reveals some apparent American nativism, with comments supportive of the UK government move receiving consistent down votes for no apparent reason. I'm old enough to remember Inmos but back then bitter rivalry didn't have a forum to express itself ;).

    1. Anonymous Coward
      Anonymous Coward

      Re: Hmmmmm

      I really don't think this is an issue of national pride. Plenty on the US side realize what will may happen if NVIDIA owns ARM. From computerword dot com -

      >>>>>>>>>

      Gold thought that Apple might wonder whether its IP is secure with Arm as a, well, arm of Nvidia. "Apple is always concerned about secrets," Gold said during the interview, perhaps understating Apple's penchant for secrecy.

      One reason Arm has been so attractive to Apple and other technology companies is that Arm's business model has been customer-neutral. Because Arm does not make its own chips, it could not directly compete with, say, Apple's silicon or force the Cupertino, Calif. company to buy chips from Arm rather than outsource the fabrication.

      "Apple wants to be in control of its own destiny," Gold observed.

      Gold also pondered the financial implications of Nvidia's purchase. "Do they want a heavy-duty payback?" he asked during the interview, referring to possible higher licensing fees. That, too, could put licensees like Apple in an unexpected spot.

      >>>>>>>>>

      As American as Apple pie.

      Pride is understandably more of a factor in the UK, ARM being living proof of UK British brilliance. Ironically most of those British Brilliants now want to maximize their stock options which will may conflict with the best interests of ARM future growth.

      1. Yet Another Anonymous coward Silver badge

        Re: Hmmmmm

        > Ironically most of those British Brilliants now want to maximize their stock options which will may conflict with the best interests of ARM future growth.

        ARM is now wholly owned by Softbank (and therefore by the Saudi sovereign wealth fund) any stock options would either have been paid out or cancelled when it was bought

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