Ex-Arm co-founder warns sale to Nvidia would be a disaster

The sale of Arm to US chip designer Nvidia would be a disaster, a co-founder of the British microchip firm has warned.

Hermann Hauser, a pioneer of the Cambridge tech scene and venture capitalist who helped spin the former FTSE-100 company out of its parent company, Acorn, told the BBC that “decisions will be made in America” and “no longer in Cambridge” if Arm was sold to the US technology giant.

The Cambridge-based chip designer, which was bought for £24.3bn ($32bn) by SoftBank in 2016, faces the prospect of being sold off as its Japanese owner has faced increasing pressure on its finances following a series of misfired bets from its $100bn Vision Fund.

Masayoshi Son, the founder of SoftBank envisioned Arm’s chip designs playing a critical role in building towards a future in which billions of devices could connect and talk to each other.

In an in-depth piece in the BBC, Mr Hauser warned that a deal with Nvidia, reported to have held talks in recent weeks over a cash-and-stock purchase, would have consequences for the technology industry.

"If it becomes part of Nvidia, most of the licensees are competitors of Nvidia, and will of course then look for an alternative to Arm," he said.

SoftBank had previously been preparing to relist Arm by 2023, but it is understood that the firm is weighing up options to return the Cambridge-based firm to the public markets by the end of next year, with the Nasdaq exchange a target destination, in addition to a sale.

A deal to buy Arm has not yet been finalised. It is understood that questions around competition issues pose challenges, with Arm offering designs to a number of Nvidia’s key rivals, including Samsung and Qualcomm.

A sale would also be complicated by a legally-binding pledge made by SoftBank to Britain’s Takeover Panel at the time of the Arm acquisition to double the company’s UK staff in five years and retain its headquarters in Cambridge.