By Scott Wright
THE new owner of technology star ARM has pledged to retain its base in the UK after announcing its $40 billion (£31.2bn) cash and shares acquisition of the Cambridge-based technology company. But a co-founder of the tech firm has voiced his opposition to the deal, branding it an “absolute disaster for Cambridge, the UK and Europe”.
US computing giant Nvidia struck a deal to buy ARM from SoftBank of Japan after weeks of speculation linking it with a bid for the business, best known for manufacturing microchips used by technology giants Apple, Samsung, and Huawei in tablets and mobile phones.
And it pledged to make good on the promises made by SoftBank when it acquired ARM in a £24.3 billion deal in 2016. That deal saw SoftBank make legal commitments to keep ARM’s headquarters in Cambridge, and to at least double its UK workforce from 1,600 in five years. It is understood to have around 3,000 UK employees now.
In a statement announcing the deal, Nvidia pledged to expand ARM’s research and development (R&D) based in Cambridge. It declared that it would build a “world-class” artificial intelligence (AI) research and education centre at the site, where plans were also revealed to build an “ARM/ NVIDIA supercomputer for ground-breaking research”.
However, ARM co-founder Hermann Hauser said the pledges made by Nvidia were “meaningless unless they are legally enforceable”, citing the precedence of US firm Kraft’s takeover of Cadbury in 2010 in an interview with the BBC.
Concern over the deal was also raised by Prospect, the union for technology workers, which described the takeover as a “worrying development for the UK tech industry and for the talented workforce at ARM, despite the assurances given by Nvidia about the future of the company”.
General secretary Mike Clancey added: “If the UK tech sector is to flourish and create the jobs of the future here in Britain, then we need our crown jewels to be owned and managed in a sustainable way that prioritises investment in the workforce and in research and development. It is not too late for the Government to take a more hands-on approach to this deal and impose some binding conditions to secure a stable future for ARM that benefits the whole country.”
The sale to Nvidia was confirmed amid an ongoing redundancy programme at ARM in the UK.
Earlier this month, The Herald revealed staff had been told that 21 roles were at risk at ARM’s Internet of Things (IoT) operation in Glasgow, where 90 staff are employed. The redundancies were a result of moves by ARM to separate its two IoT Services Group (ISG) businesses within the group.
A spokeswoman for ARM said last night that Nvidia has agreed to acquire the whole of ARM’s semiconductor business, and that the deal will not affect the separation plans. She noted that the IoT services businesses will be transferred out of ARM before the Nvidia deal is approved by regulators, which is expected to in around 18 months. ARM has had a presence in Glasgow since its acquisition of IoT business Stream Technologies in 2016.
ARM was hailed as the UK’s last great technology hope at the time of its sale to SoftBank in 2016. At the time of the deal, struck in the aftermath of the Brexit vote, UK ministers secured pledges that SoftBank would expand its headcount in the UK and retain its headquarters here. Those pledges are due to expire in September next year. Sonja Laud of Legal & General Investment Management,said it will be “very interesting to see how this develops in the future”, noting the expiry date on the pledges and with Brexit negotiations under way.
Jensen Huang, founder and chief executive of Nvidia, said: “ARM will remain headquartered in Cambridge. We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields. And, to attract researchers and scientists from the UK and around the world to conduct groundbreaking work, NVIDIA will build a state-of-the-art AI supercomputer, powered by ARM CPUs.”
Shadow Business Secretary Ed Miliband said it was “incredibly important” that UK jobs and ARM’s headquarters in Cambridge are protected, and expressed concern that a provider of processors will be removed from the market if ARM is “swallowed up and denuded”. Nvidia , which also makes processors, said that ARM would “continue to operate its open-licensing model, while maintaining its global customer neutrality”.
The BBC reported that Mr Hauser and fellow ARM co-founder Tudor Brown have suggested the firm should stay neutral and not be owned by a company like Nvidia, which produces its own processors.
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