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26 January, 2022 - 09:55 By Tony Quested

Hauser applauds SoftBank plan for Arm IPO if NVIDIA exits

Speculation is rising in the US that tech giant NVIDIA is set to walk away from a proposed $40 billion acquisition of Cambridge superchip architect Arm as opposition to the deal mounts among global governments.

The company has made no official announcement and Arm referred us to NVIDIA for comment on media reports in America that the deal is effectively dead in the water.

Arm’s Japanese parent SoftBank is reportedly already planning to float the company if NVIDIA exits. The UK is the favoured market but a twin IPO in London and on NASDAQ remains an option.

Cambridge serial entrepreneur Dr Hermann Hauser – co-founder of Arm as it spun out of Acorn Computers in 1990 – told Business Weekly today that “sense is prevailing.”

He said: “Arm needs to remain the Switzerland of the semiconductor industry; having a licensee own the business would be clearly anticompetitive as such a takeover would make NVIDIA the only company that does not have to pay a licence fee for access to Arm IP.

“It was always unlikely that NVIDIA would get clearance from every competition authority in the US, UK, EU and China.

“If NVIDIA’s withdrawal from a deal is officially confirmed SoftBank can now proceed with its original plan of taking Arm public again – hopefully on the London market where it belongs.”

Regardless of individual opinion, there are wider implications for Arm and UK trade if NVIDIA walks away.

Out of the window with the deal could go plans by NVIDIA and Arm to spend many more billions on technology innovation in the Cambridge Cluster. Business Weekly is digging deeper into that particular issue.

Arm has already warned that the collapse of the acquisition could also deal a hammer blow to the UK economy as the Government struggles to land any significant trade deals internationally.

An NVIDIA exit would be financially painful for Arm’s Japanese parent SoftBank which could lose almost $75bn. And it could cripple ongoing investment by Arm in Cambridge and technology progress globally led by its IP.

Arm CEO Simon Segars has recently gone on record in a submission to the UK’s competition chiefs – reported in Business Weekly – as saying that future Arm investment in growth and tech innovation could be fatally throttled if SoftBank was forced down the IPO route. 

An IPO would give Arm nowhere near enough financial ammunition in its war chest to fulfil a bold global blueprint, Segars warned the UK government. And that scenario could also impact negatively on Arm’s Cambridge operations – and people – for those astute enough to read between the lines.

Another issue Business Weekly is exploring is what impact on competition other US acquisitions of Cambridge science & technology companies has made down the last three decades. Are we to put a ceiling on the amount that can be paid to secure a Cambridge acquisition – or force buyers to confirm legally that such a deal will definitely NOT impact any of the acquired company’s competitors? 

And by doing so are we erecting a ‘Not for Sale’ sign in the entrances of every life science or hi-tech company in the Cambridge Cluster. We are quizzing leading serial entrepreneurs on that point as we write.

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