The United Kingdom is investigating the proposed “merger” of ARM and Nvidia. Her Majesty’s government says it’s worried that there are national security implications.
Nvidia is described by some as a wolf in sheep’s clothing. Much of the industry is deeply worried that ARM will be ripped apart, eviscerating its independence and killing its ability to sell to Nvidia competitors—Apple, Broadcom, Qualcomm, AMD, MediaTek, etc.
Yes, but is there really a security question? Or is that a convenient excuse to slam on the brakes? In today’s SB Blogwatch, we avoid weak jokes about fish and chips.
Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: The pop aughts.
Nvidia to Stay ARMless?
What’s the craic? Paul Sandle reports—“UK invokes national security to investigate Nvidia’s ARM deal”:
Vital supplier to multiple chipmakers”
The UK government will look into the national security implications of U.S. group Nvidia’s purchase of British chip designer ARM Holdings … raising a question mark over the $40 billion deal. … ARM is a major player in global semiconductors. … Its designs power nearly every smartphone and millions of other devices.
Nvidia said it does not believe the deal poses any material national security issues. “We will continue to work closely with the British authorities, as we have done since the announcement of this deal,” said Nvidia, the biggest U.S. chip company by market capitalisation.
The Competition and Markets Authority (CMA) will assess the competition, jurisdiction and national security impact of the deal, with a report due by July 30, the government said. … The CMA has been looking into the deal since January, focusing on whether ARM could raise prices or reduce services to customers that compete with Nvidia. [It would put] a vital supplier to multiple silicon chipmakers under the control of a single player.
ARM, which was founded and is still based in the English university city of Cambridge, does not make chips but has created an instruction set architecture on which it bases designs for computing cores. Its … designs and technology are licensed to customers such as Qualcomm, Apple and Samsung Electronics.
And Matthew Hughes adds, “UK digital secretary Oliver Dowden starts national security probe”:
Kneecap rival chipmakers”
The proposed sale of Arm to Nvidia looks a bit more tenuous. [It] has kicked-off a further degree of scrutiny, with the CMA instructed to include any potential national security concerns in its upcoming report on the merger.
In order for the deal to close, Nvidia must satisfy regulators in the US, China, and the UK. … The proposed acquisition has met fierce pushback from some in the industry, who fear Arm may dilute its existing licensing-based business model, or modify it in order to kneecap rival chipmakers that rely on the company’s designs. Among the companies known to have objected during the FTC’s investigation are Qualcomm, Google, and Microsoft.
Use the source, Luke. The announcement by Gov.UK—“Anticipated acquisition by NVIDIA Corporation of ARM Limited”—boils down to this:
Interests of national security”
The Secretary of State has reasonable grounds for suspecting that, as a result of the proposed acquisition by the NVIDIA Corporation (a corporation incorporated under the laws of Delaware) [of] ARM Ltd (a company incorporated and registered in England and Wales) … the interests of national security … are relevant to a consideration of the relevant merger situation.
SRSLY? Martin drinkypoo Espinoza asks the question (rhetorically):
Security through obscurity is not a thing”
Seriously? There are lots of reasons why the UK shouldn’t want the sale of ARM to nVidia to go through, but national security is simply not one of them, because security through obscurity is not a thing. If owning ARM means that nVidia would know secrets of how to get into UK military equipment, then that equipment was poorly designed from the beginning and the parties responsible should be sacked.
Let’s get real. Isn’t it simply about British jobs? Si 1 seems to think so:
How long is that really going to last?”
If ARM is that important to national security then the government should be buying it. Whenever a UK company gets bought all that ever seems to happen is the IP gets retained and all the jobs go elsewhere. I know ARM is currently still based in the UK, but how long is that really going to last, under Nvidia?
But this Anonymous Coward explains the nat-sec background (as they see it):
The national security concern may be more a matter of leverage, as in a US company owning and commanding that market, and the larger reliance created as a result of that merger. Not unlike the issues with leverage the world is currently experiencing with its heavy reliance on Taiwanese chip manufacturing.
It’s risk mitigation for a major vendor in the government supply chain. Yeah, I’d say it could easily have some impact on national security.
And there are huge strategic implications for the entire industry, as tokyojoe points out:
The semiconductor supply chain is now almost completely disaggregated: … ARM’s speciality is in CPU design and it has carved out for itself the enviable position of being the de facto standard for mobile applications … and their products are in dozens of other end applications segments. [It’s] embedded in System on Chip IC’s and manufactured by third party companies like TSMC and UMC etc to end customer specifications, like Apple or Samsung.
Nvidia … will simply hollow ARM out … to pump up the target’s value, before flogging it off or breaking it up. … Given its strategic position as the defacto standard for mobile comms, that’s a serious threat.
ARM also gives the UK strategic leverage in any trade negotiations. Would we knowingly allow Rolls-Royce Jet Engines to be flogged off? No. Ditto ARM.
But we can trust Nvidia not to do that, right? Wrong, says chuckufarley:
Don’t blame anyone for not trusting Nvidia”
3DFX … published an open source driver that Nvidia used to steal their patented hardware acceleration technology. Then when 3DFX sued Nvidia for patent infringement, Nvidia committed a very hostile takeover of 3DFX in order to make the case disappear. … I don’t blame anyone for not trusting Nvidia.
Although, the way BAReFO0t sees it, the rot goes far deeper:
Biggest spying apparatus in the world”
America’s Huawei: That’s basically what Intel, Nvidia, etc. are. Just because we had a reality distortion bubble going for the last 70 years doesn’t mean the US doesn’t have the biggest spying apparatus in the world … and that it does it for its industry too.
Speaking of which, klelatti fields another national-security angle:
Nvidia might stop that and work with NSA”
I’ve been struggling to understand why Nvidia’s takeover of Arm might be a UK national security issue (the competition case is quite clear but separate). I’m guessing though that Arm collaborates with UK intelligence agencies and that that collaboration might be jeopardised with the Nvidia takeover: … Arm might be working with GCHQ and … Nvidia might stop that and work with NSA.
Even if the UK does allow it, others might not. Mark mark l 2’s words: [You’re fired—Ed.]
No way China is going to allow the sale”
It’s a very slim chance that China is going to allow the sale to Nvidia … even if it does get passed in the UK. With the US gov’s current strategy of cutting off supplies of US made tech to Huawei and other China based tech companies, there is no way China is going to allow the sale of ARM to a US based company. [It] would just give the US gov more ARMament to use in their trade wars.
Meanwhile, manu0601 foresees potential dirty tricks ahoy:
Time for DoJ involvement”
This should be the time where US DoJ puts some ARM executive behind the bars, to convince the CEO that selling to a US company is a good idea to spare a huge fine for some US law violation.
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