Arm Holdings takeover: has Nvidia had its chips?
The takeover of Britain’s semiconductor group Arm Holdings by its US rival Nvidia could be running into the sand, says Matthew Partridge.
The $40bn acquisition of British semiconductor manufacturer Arm Holdings by America’s Nvidia has been left hanging in the balance, says Amy Thomson on Bloomberg. The culture secretary, Oliver Dowden, says the government may intervene to prevent the tie-up. Dowden has ordered the Competition and Markets Authority (CMA), which is already looking at the impact on competition, to investigate the national security aspects of the deal too.
He notes that the semiconductors are not only “fundamental” to a “wide range of technologies”, including those in defence and national security, but also “underpin the UK’s critical national infrastructure”. Nvidia’s ownership could bring Arm under the “control of powerful US national security laws” that could one day be “used against Britain’s interests”, says Hannah Boland in The Daily Telegraph.
The next US tech monopoly
National security concerns aren’t the only reason why some are opposing the deal, says Mark Sweney in The Guardian. Hermann Hauser, Arm’s original co-founder, has argued that it would be “an absolute disaster for Cambridge, the UK and Europe”, as Nvidia would inevitably decide to relocate Arm to the US, leading to lost jobs.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
More importantly, being owned by Nvidia would also destroy Arm’s “even-handed” model of licensing its chip designs to a wide range of technology companies, including Apple, Samsung and Qualcomm, turning the combined company into “the next US tech monopoly alongside companies such as Google, Facebook and Amazon”.
Even if the British government eventually gives the deal its blessing, it still might not go ahead, says Gina Chon on Breakingviews. Thanks to complaints from Microsoft and Google, the US Federal Trade Commission (FTC) also has the deal under “extended review” on competition grounds. An “unprecedented” semiconductor shortage is already causing the FTC review to go on for much longer than originally anticipated and giving it “more reason to hit pause”. The “global regulatory pile-on” means that Nvidia and Arm “must prepare for regulators to chip away further”.
Although Nvidia continues to maintain that it “can score the necessary government approvals to close the Arm deal”, its behaviour is making this harder, says Dan Gallagher in The Wall Street Journal. Last week Nvidia announced the launch of a new central processing unit, or CPU, called Grace. It is designed for use in data centres, which would effectively compete for the data-centre slots mostly occupied by chips from Intel and Advanced Micro Devices (AMD). While the move boosted Nvidia’s share price, the fact that both Grace and the current offerings from AMD and Intel use Arm technology makes it easy to see how merging Nvidia and Arm could reduce competition.
-
How gifting money this Christmas could lower your inheritance tax billCash is an easy and quick present to give over Christmas – and it could protect some of your estate from the taxman down the line
-
£100 contactless card limit to be liftedConsumers will be able to set their own contactless limits from March 2026, under new rules from the Financial Conduct Authority
-
Luana Lopes Lara: The ballerina who made a billion from prediction marketsLuana Lopes Lara trained at the Bolshoi, but hung up her ballet shoes when she had the idea of setting up a business in the prediction markets. That paid off
-
British blue chips offer investors reliable income and growthOpinion Ben Russon, portfolio manager and co-head UK equities, ClearBridge Investments, highlights three British blue chips where he'd put his money
-
Coreweave is on borrowed timeAI infrastructure firm Coreweave is heading for trouble and is absurdly pricey, says Matthew Partridge
-
Renewable energy funds are stuck between a ROC and a hard placeRenewable energy funds were hit hard by the government’s subsidy changes, but they have only themselves to blame for their failure to build trust with investors
-
Profit from document shredding with RestoreRestore operates in a niche, but essential market. The business has exciting potential over the coming years, says Rupert Hargreaves
-
The war dividend – how to invest in defence stocks as the world arms upWestern governments are back on a war footing. Investors should be prepared, too, says Jamie Ward
-
Literacy Capital: A trust where great returns fund a good causeThere’s plenty to like about specialist private-equity trust Literacy Capital, says Max King
-
An AI bust could hit private credit – could it cause a financial crisis?Opinion Private credit is playing a key role in funding data centres. It may be the first to take the hit if the AI boom ends, says Cris Sholto Heaton
