The boss of Arm has moved to tackle prolonged concerns that the British chip designer's proposed $40bn buyout by Nvidia could damage competition and spell disaster for the UK's tech sector.
Writing in a company blog at the weekend, Simon Segars, chief exec of Arm, was quick to latch onto the significance of the "history-making" deal while dismissing what he described as the "ill-informed speculation out there about what the future of Arm with Nvidia will look like."
The proposed deal has been repeatedly attacked on multiple fronts, not least by its customers and potential investors.
Taking aim at critics, Segars said: "Some believe that an initial public offering (IPO) would have been a better path. Others are concerned that Arm will leave the UK, while some have fears that Arm will become anti-competitive. These assumptions couldn't be further from the truth, and I'd like to address them head-on."
Segars' comments come as the Competition and Markets Authority (CMA) puts the finishing touches on its analysis of the proposed buyout, which is due to be handed to the Secretary of State for Digital, Culture, Media and Sport by the end of the month.
The UK's digital secretary, Oliver Dowden, increased tensions around the proposed deal when he took a personal interest in the case in April, issuing a Public Interest Intervention Notice (PIIN) amid concerns that the sale could raise issues around national security.
Segars' public intervention so close to the CMA's deadline is a sign that things are ramping up.
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Addressing concerns that may keep ministers and policymakers awake at night, Segars said: "Arm will remain headquartered in the UK, and we will be able to increase our investment in UK-based talent. The UK is already recognized as one of the leaders of AI research and academia; together with Nvidia we have the ambition to evolve the UK into the centre of the AI world."
He went on: "Nvidia will not siphon investment away from the UK. Instead, it will invest in the expansion of Arm's Cambridge HQ and build a world-class AI research facility. The combination of Arm's technology with Nvidia's deep expertise in AI will make the UK the leader in research, innovation and scientific discovery for decades to come."
Turning his attention away from strategic concerns, he sought to address fears that the buyout could be seen as being anti-competitive.
"We'll invest with Nvidia to create new markets, not displace customers in existing ones," said Segars. "This transaction opens up access to even more innovation that the entire semiconductor industry can harness."
And in a bid to play down the significance of other forms of funding, Segars said the company "contemplated an IPO" but opted for long-term investment over the "pressure to deliver short-term revenue growth and profitability."
But not everyone is happy. Richard Holway, chairman at research goup TechMarketView and long-term fan of Arm, was unimpressed by Segars' comments. He maintained today that "Arm's real strength is that it is customer agnostic."
"Under Nvidia's ownership, it would be anything but. Indeed, that is why so many of its customers – like Qualcomm, Microsoft, and Google – are so against the deal that they are prepared to launch a consortium to back a relist to retain Arm's independence," he said.
Denting Segars' claims about an IPO, the TMV analyst claimed Arm's success was built on the fact that it first floated on the London Stock Exchange in 1998 and remained a UK publicly quoted company for the next 18 years. During that time, he said, it grew from a tiny company to a "global force responsible for the design of chips used in 98 per cent of the world's smartphones."
The CMA's deadline for submitting its report to the Secretary of State is 30 July 2021. ®