The UK government is finally taking a look at the sale of the chip designer to US firm Nvidia, but why not just buy a controlling interest?
Last September, Nvidia, the American manufacturer of graphics processing chips, and the Japanese company SoftBank announced an agreement under which Nvidia would acquire the British chip designer Arm from SoftBank for $40bn. Since SoftBank had acquired Arm in 2016 for $32bn, you could say that a 25% profit on a five-year investment isn’t to be sneezed at, especially if industry mutterings about SoftBank’s crackpot investment strategy and Arm’s internal difficulties with its China-based operation are to be believed.
But even if one were foolish enough to sympathise with SoftBank’s desire to climb out of the hole it had dug for itself, the idea that Arm should be sold to a US chip manufacturer is so daft that even Boris Johnson’s administration had begun to smell a rat. And so on Monday it announced that the secretary of state for digital, culture, media and sport was “intervening in the sale on national security grounds”, based on advice received “from officials across the investment security community”. To which decision the only possible response is: what took him so long?