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 …
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).
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.
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
"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.
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.
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.
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.
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.
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.
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.
It's supposed to stand for Digital, Culture, Media, and Sport.
And chips are digital, innit?
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.
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?
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 ;).
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.
> 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
*shrug* Personally I'm used to being downvoted by Americans for refusing to rah-rah their nation. I'm a Canadian, so my views are not colored by their propaganda and brainwashed "patriotism."
Being American means never questioning the activities of your nation and its business; being Canadian means you aren't led to believe that you are "global powers" or "leaders" in anything of note, so you don't end up with such a "national ego" in play.
With gunboats ready to do battle with French, a trade war (there was meant to be deal, no?) with the EU imminent, conditions similar to those that started the troubles in Northern Ireland, there is meant to be, eventually, a grand US trade deal that would make up for all this. Someone in the US may just notice, 'hey, you appear to have blocked one of our largest tech companies from buying one based in your country that's owned by the Japanese."
Exactly - there was never meant to be a US trade deal. Its suggestion was a sop to a small faction of idiots who prefer living under the kosh of the US to living under the kosh of Europe.
Still it got a few more Brexit Yesses, so job done.
"A spokesperson at Nvidia told us: "We plan on addressing the CMA's initial views on the impact of the transaction on competition, and we will continue to work with the UK government to resolve its concerns. The Phase 2 process will enable us to demonstrate that the transaction will help to accelerate Arm and boost competition and innovation, including in the UK.""
Did Nvidia's spokesperson previously work as a stand-up comedian? Because as jokes go "boost competition" is a whopper.
That's the first thing companies look for when deciding on a takeover will it "boost competition". Because that's what a company like Nvidia wants, too boost the competition. :) :)
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