UK investigating Nvidia's Arm takeover citing national security concerns

AppleInsider · November 16, 2021 2:49PM

The British government has begun a "national security" investigation into Nvidia buying UK-based processor design firm Arm.

ARM May be acquired by Nvidia if regulators approve

As previously reported, UK regulators have said that there are anti-competition and security concerns at the prospect of US firm Nvidia buying Arm. Currently Arm is owned by Japan's SoftBank, but is based in Britain, and the UK is one of a series of countries that must approve the $40 billion deal.

According to Financial Times, UK digital and culture secretary Nadine Dorries has ordered what's called a Phase 2 investigation, following "serious competition concerns."

"[Arm has a] unique place in the global technology supply chain," said Dorries, "and we must make sure the implications of this transaction are fully considered."

"The secretary of state believes that the ubiquity of Arm technology makes the accessibility and reliability of Arm IP necessary for national security," says a government letter seen by the Financial Times.

The concerns that the UK, and other countries including China and Brazil, have are to do with how Arm's designs are heavily used by Nvidia's rivals. The UK's Competition and Markets Authority has argued that Nvidia could harm competitors by raising prices.

"We plan on addressing the CMA's initial views on the impact of the transaction on competition," an Nvidia spokesperson told the Financial Times, "and we will continue to work with the UK government to resolve its concerns."

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crowley · November 16, 2021 2:56PM

I thought they were already doing this. Seems to have been noise about it for ages.

GeorgeBMac · November 16, 2021 3:59PM

Yes, the issue was raised by many -- including one of the founders. But I am not aware of any formal investigation into the claims and concerns.

But, it is certainly a legitimate concern:

Under Trump, the U.S. was promoting a "look out for #1" nationalistic strategy and attacking other countries by blocking them from using U.S. technology (which ARM would be if NVIDIA buys it). That foolishness has fallen away under Biden. But, Trump and his nationalistic approach that ignores any and all prior agreements could be back. The UK is certainly aware of that.

(Iran certainly is: one of their conditions is that the U.S. guarantees it won't break its agreements and promises with a change of administration.)

maciekskontakt · November 16, 2021 6:21PM

sbdude said:

GeorgeBMac said:

Yes, the issue was raised by many -- including one of the founders. But I am not aware of any formal investigation into the claims and concerns.

But, it is certainly a legitimate concern:
Under Trump, the U.S. was promoting a "look out for #1" nationalistic strategy and attacking other countries by blocking them from using U.S. technology (which ARM would be if NVIDIA buys it). That foolishness has fallen away under Biden. But, Trump and his nationalistic approach that ignores any and all prior agreements could be back. The UK is certainly aware of that.
(Iran certainly is: one of their conditions is that the U.S. guarantees it won't break its agreements and promises with a change of administration.)

Because preventing Iran from having the technology necessary to bolster is "domestic nuclear agenda" is somehow a bad thing.

It is dislike for Trump actions without even trying to understand them. Just bad orange man. Proves how some people use their brains (or not). ARM patents are owned by SoftBank (and owner of my former employer). Not many seem to know that Apple is one of investors in SoftBank. Masayoshi Son had great idea albeit utopia to build tech company for 200 years. The problem is that nothing lasts longer than 20-30 years these days and technology changes every two years. That drives directions.

maciekskontakt · November 16, 2021 6:29PM

GeorgeBMac said:

Yes, the issue was raised by many -- including one of the founders. But I am not aware of any formal investigation into the claims and concerns.

But, it is certainly a legitimate concern:
Under Trump, the U.S. was promoting a "look out for #1" nationalistic strategy and attacking other countries by blocking them from using U.S. technology (which ARM would be if NVIDIA buys it). That foolishness has fallen away under Biden. But, Trump and his nationalistic approach that ignores any and all prior agreements could be back. The UK is certainly aware of that.
(Iran certainly is: one of their conditions is that the U.S. guarantees it won't break its agreements and promises with a change of administration.)

What is "nationalistic" about the approach? Do you even understand the word in the context you are using? As opposed to Comintern? I do not buy it as I lived in place like that tried that. Now national security is key to safety of your cozy corner where you are typing it from.

rmoo · November 16, 2021 7:55PM

This is just a pique of nationalist pride. The U.K. had no problem with a Japanese company buying ARM and similarly would not have cared were it a Taiwanese, Canadian, Australian, South Korean, German etc. company. No, just as long as the bloody yanks don't get their filthy paws on it they are fine. It was only when Nvidia made a bid for the company that one of ARM's founders and a bunch of other people claimed "it is imperative that we not allow the U.K.'s most prominent tech company to leave our shores." Except they already did that when Softbank bought it.

Fine, go ahead. Block the deal. But I hope they realize that when that happens, no one else is going to rise up and buy ARM for anywhere near what Nvidia is paying. Intel and AMD don't need Nvidia. Google and Microsoft are not hardware companies. Apple has their own IP and now Qualcomm does too (Nuvia). MediaTek and the rest are simply content to license Nvidia's mediocre IP ... they don't need to pay $40 billion for the cow when they can get the milk for licensing fees.

When ARM's original co-founder tried to raise the money to come up with a competitive counteroffer to Nvidia, he didn't come anywhere close. He just slinked away. Well here is the deal: RISC-V is going to put that company out of business soon anyway. Right now RISC-V's two biggest problems are a lack of big money backers and a limited instruction set. Even with those issues, the latest RISC-V cores perform at about the same level as ARM's Cortex-A78. There is also already a C++ compiler for RISC-V and work to port Java (OpenJDK) to RISC-V is well underway, as well as work to get Javascript working on it also. When RISC-V becomes viable, all of the major companies will be able to use it to design much better CPUs and GPUs than are possible with ARM Holdings' Cortex-A, Cortex-X and Mali. And the value of ARM Holdings will plummet.

So go ahead U.K. Have your fun with your temper tantrum over the inability of EU countries - current and former - to create a tech sector that is competitive with the United States, Japan, and even smaller countries like South Korea and Taiwan. Ah, the economic benefits of socialism! By doing this you are actually preventing Nvidia from wasting $40 billion.

Nvidia, move on from these folks and pour that $40 billion into creating RISC-V based CPUs and GPUs that will run ARM Holdings out of business. Then you will be able to buy them for closer to $4 billion than $40 billion.

crowley · November 16, 2021 8:54PM

I just noticed that the article quoted Nadine Dorries. What a world where Nadine Dorries ends up being quoted on AppleInsider

This country is a joke.

IreneW · November 16, 2021 9:36PM

rmoo said:

This is just a pique of nationalist pride. The U.K. had no problem with a Japanese company buying ARM and similarly would not have cared were it a Taiwanese, Canadian, Australian, South Korean, German etc. company. No, just as long as the bloody yanks don't get their filthy paws on it they are fine. It was only when Nvidia made a bid for the company that one of ARM's founders and a bunch of other people claimed "it is imperative that we not allow the U.K.'s most prominent tech company to leave our shores." Except they already did that when Softbank bought it.

Fine, go ahead. Block the deal. But I hope they realize that when that happens, no one else is going to rise up and buy ARM for anywhere near what Nvidia is paying. Intel and AMD don't need Nvidia. Google and Microsoft are not hardware companies. Apple has their own IP and now Qualcomm does too (Nuvia). MediaTek and the rest are simply content to license Nvidia's mediocre IP ... they don't need to pay $40 billion for the cow when they can get the milk for licensing fees.

When ARM's original co-founder tried to raise the money to come up with a competitive counteroffer to Nvidia, he didn't come anywhere close. He just slinked away. Well here is the deal: RISC-V is going to put that company out of business soon anyway. Right now RISC-V's two biggest problems are a lack of big money backers and a limited instruction set. Even with those issues, the latest RISC-V cores perform at about the same level as ARM's Cortex-A78. There is also already a C++ compiler for RISC-V and work to port Java (OpenJDK) to RISC-V is well underway, as well as work to get Javascript working on it also. When RISC-V becomes viable, all of the major companies will be able to use it to design much better CPUs and GPUs than are possible with ARM Holdings' Cortex-A, Cortex-X and Mali. And the value of ARM Holdings will plummet.

So go ahead U.K. Have your fun with your temper tantrum over the inability of EU countries - current and former - to create a tech sector that is competitive with the United States, Japan, and even smaller countries like South Korea and Taiwan. Ah, the economic benefits of socialism! By doing this you are actually preventing Nvidia from wasting $40 billion.

What does "socialism" have to do with any of this?
Or do you mean socialism as in common social ownership, like open source and RISC-V?

GeorgeBMac · November 17, 2021 8:08AM

maciekskontakt said:

GeorgeBMac said:

Yes, the issue was raised by many -- including one of the founders. But I am not aware of any formal investigation into the claims and concerns.

But, it is certainly a legitimate concern:
Under Trump, the U.S. was promoting a "look out for #1" nationalistic strategy and attacking other countries by blocking them from using U.S. technology (which ARM would be if NVIDIA buys it). That foolishness has fallen away under Biden. But, Trump and his nationalistic approach that ignores any and all prior agreements could be back. The UK is certainly aware of that.
(Iran certainly is: one of their conditions is that the U.S. guarantees it won't break its agreements and promises with a change of administration.)

What is "nationalistic" about the approach? Do you even understand the word in the context you are using? As opposed to Comintern? I do not buy it as I lived in place like that tried that. Now national security is key to safety of your cozy corner where you are typing it from.

Trump used "National Security" as an excuse to attack other countries through their corporations -- all under the justification of his nationalist "America First" policy. The U.S. lost all of its credibility under him. Our word and honor meant nothing under him. Now, with him threatening to return, other countries have to question whether we can be trusted again.

GeorgeBMac · November 17, 2021 8:13AM

rmoo said:

This is just a pique of nationalist pride. The U.K. had no problem with a Japanese company buying ARM and similarly would not have cared were it a Taiwanese, Canadian, Australian, South Korean, German etc. company. No, just as long as the bloody yanks don't get their filthy paws on it they are fine. It was only when Nvidia made a bid for the company that one of ARM's founders and a bunch of other people claimed "it is imperative that we not allow the U.K.'s most prominent tech company to leave our shores." Except they already did that when Softbank bought it.

Fine, go ahead. Block the deal. But I hope they realize that when that happens, no one else is going to rise up and buy ARM for anywhere near what Nvidia is paying. Intel and AMD don't need Nvidia. Google and Microsoft are not hardware companies. Apple has their own IP and now Qualcomm does too (Nuvia). MediaTek and the rest are simply content to license Nvidia's mediocre IP ... they don't need to pay $40 billion for the cow when they can get the milk for licensing fees.

When ARM's original co-founder tried to raise the money to come up with a competitive counteroffer to Nvidia, he didn't come anywhere close. He just slinked away. Well here is the deal: RISC-V is going to put that company out of business soon anyway. Right now RISC-V's two biggest problems are a lack of big money backers and a limited instruction set. Even with those issues, the latest RISC-V cores perform at about the same level as ARM's Cortex-A78. There is also already a C++ compiler for RISC-V and work to port Java (OpenJDK) to RISC-V is well underway, as well as work to get Javascript working on it also. When RISC-V becomes viable, all of the major companies will be able to use it to design much better CPUs and GPUs than are possible with ARM Holdings' Cortex-A, Cortex-X and Mali. And the value of ARM Holdings will plummet.

So go ahead U.K. Have your fun with your temper tantrum over the inability of EU countries - current and former - to create a tech sector that is competitive with the United States, Japan, and even smaller countries like South Korea and Taiwan. Ah, the economic benefits of socialism! By doing this you are actually preventing Nvidia from wasting $40 billion.

Nvidia, move on from these folks and pour that $40 billion into creating RISC-V based CPUs and GPUs that will run ARM Holdings out of business. Then you will be able to buy them for closer to $4 billion than $40 billion.

Funny how they trust a Japanese company to uphold their word but not an American company.

It's probably because Trump leveraged American companies and technology to threaten and attack other countries. With him threatening to return, I find it entirely understandable that the UK would be concerned about turning its highly prized technology over to such an untrustworthy scoundrel.

crowley · November 17, 2021 1:11PM

rmoo said:

This is just a pique of nationalist pride. The U.K. had no problem with a Japanese company buying ARM and similarly would not have cared were it a Taiwanese, Canadian, Australian, South Korean, German etc. company. No, just as long as the bloody yanks don't get their filthy paws on it they are fine. It was only when Nvidia made a bid for the company that one of ARM's founders and a bunch of other people claimed "it is imperative that we not allow the U.K.'s most prominent tech company to leave our shores." Except they already did that when Softbank bought it.

Fine, go ahead. Block the deal. But I hope they realize that when that happens, no one else is going to rise up and buy ARM for anywhere near what Nvidia is paying. Intel and AMD don't need Nvidia. Google and Microsoft are not hardware companies. Apple has their own IP and now Qualcomm does too (Nuvia). MediaTek and the rest are simply content to license Nvidia's mediocre IP ... they don't need to pay $40 billion for the cow when they can get the milk for licensing fees.

When ARM's original co-founder tried to raise the money to come up with a competitive counteroffer to Nvidia, he didn't come anywhere close. He just slinked away. Well here is the deal: RISC-V is going to put that company out of business soon anyway. Right now RISC-V's two biggest problems are a lack of big money backers and a limited instruction set. Even with those issues, the latest RISC-V cores perform at about the same level as ARM's Cortex-A78. There is also already a C++ compiler for RISC-V and work to port Java (OpenJDK) to RISC-V is well underway, as well as work to get Javascript working on it also. When RISC-V becomes viable, all of the major companies will be able to use it to design much better CPUs and GPUs than are possible with ARM Holdings' Cortex-A, Cortex-X and Mali. And the value of ARM Holdings will plummet.

So go ahead U.K. Have your fun with your temper tantrum over the inability of EU countries - current and former - to create a tech sector that is competitive with the United States, Japan, and even smaller countries like South Korea and Taiwan. Ah, the economic benefits of socialism! By doing this you are actually preventing Nvidia from wasting $40 billion.

Nvidia, move on from these folks and pour that $40 billion into creating RISC-V based CPUs and GPUs that will run ARM Holdings out of business. Then you will be able to buy them for closer to $4 billion than $40 billion.

I read your post with interest until you started ranting about socialism. Way to kill your credibility.

On further research I think you're on the extreme end of optimistic about RISC-V. It is certainly promising, but the idea that it's going to "kill" ARM "soon" is wishful thinking.

OutdoorAppDeveloper · November 17, 2021 5:26PM

I am starting to have mixed feelings about NVIDIA buying ARM. ARM has traditionally lagged in performance behind Apple's custom versions of the architecture. At first I felt that NVIDIA buying ARM could make the platform a lot more competitive with Apple and lead to some very interesting new products such as GPUs that include CPUs that can run games without any operating system interference (smoother frame rates, less hangs, etc.) However now it is clear that the purchase will never get past British and EU regulators and I wonder why NVIDIA needs to own the ARM platform? Why not license it like Apple and make a special NVIDIA version of the chip with better performance or customized for games or servers?

Marvin · November 17, 2021 8:56PM

OutdoorAppDeveloper said:

I wonder why NVIDIA needs to own the ARM platform? Why not license it like Apple and make a special NVIDIA version of the chip with better performance or customized for games or servers?

According to the Nvidia CEO the purchase is to better compete with Intel:

https://www.zdnet.com/article/nvidia-ceo-jensen-huang-says-arms-been-too-specific-needs-to-be-a-broad-computing-platform/

There are a lot of chips shipped using ARM but they don't all ship with support for things like AI the way Nvidia supports this on Nvidia GPUs. They want to bring their IP to ARM's much larger distribution scale. Licensing doesn't give them control over this.

They want to add value to the chips, then profit from it at a scale they haven't been able to achieve on their own. For them to profit from it, they'd likely raise prices.

Nvidia is at risk of being shut out of a large part of the PC market over the long term. Apple's M1 Max at 10TFLOPs is a powerful gaming chip and over time, there will be a number of ARM chip makers that can do this on their own and cheaper than Nvidia can do.

ARM will start to be used more in servers but without Nvidia's IP, they won't have the memory bandwidth to connect to Nvidia GPUs to be competitive in AI whereas Intel can design their CPUs to work better with their upcoming dedicated Arc GPUs.

If Nvidia agreed to terms that settled the concerns, a buyout could be ok but Nvidia says they wants to bundle their IP across the ARM distribution channel and profit from it, which suggests a broad scale raising of prices along with pushing their proprietary IP, which would result in Nvidia having a more dominant position with their proprietary IP that would be hard for others to compete against.

UK investigating Nvidia's Arm takeover citing national security concerns

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