Hermann Hauser questions Nvidia’s suitability for Arm
Hermann Hauser, the Cambridge-based entrepreneur and investor, has spoken of his concern about the possibility that Arm may be sold to US giant Nvidia.
Arm was sold to Softbank in 2016 for £23bn. Even that sale was contentious – as reported in the Cambridge Independent in 2017, ex-Arm chairman Stuart Chambers said: “I do regret having to sell Arm, yes. It had been hugely successful for 25 years and we very much thought there was the possibility of another 25.”
The issue - and a long-running concern for advocates of the Cambridge ecosystem - is that companies sell out for short-term reasons and the science or technology then takes second place to the interests of investors and shareholder dividends.
“Whatever they say, most investors were interested in a three-year time horizon,” Mr Chambers said. “There was one shareholder who claimed to be interested in the 10-year story and half their shareholding voted against the deal.”
By any standards the Softbank deal appears to be in trouble faster than anyone could have predicted, but this year the Japanese conglomerate’s considerable financial losses – around $16.7bn in the last fiscal year – have forced it to take action. In July, Softbank pushed Arm back to focussing on chip design by spinning off its two IoT services group (ISG) businesses.
“Arm believes there are great opportunities in the symbiotic growth of data and compute,” said Simon Segars, CEO of Arm, last month. “SoftBank’s experience in managing fast-growing, early-stage businesses would enable ISG to maximize its value in capturing the data opportunity. Arm would be in a stronger position to innovate in our core IP roadmap and provide our partners with greater support to capture the expanding opportunities for compute solutions across a range of markets.”
The company – also last month – hired Goldman Sachs, allegedly to oversee a sale of Arm or its IP.
Speaking to the BBC’s technology correspondent, Rory Cellan-Jones, Dr Hauser – who spun out Arm from Acorn Computers in 1990 – said: “The one saving grace about Softbank was that it wasn’t a chip company, and retained Arm’s neutrality.
“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.”
Nvidia recently overtook Intel to become the world’s most valuable chip-maker.
Dr Hauser has concerns about what will happen were Arm to be swallowed up by what is effectively a competitor.
“It will become one of the Nvidia divisions, and all the decisions will be made in America, no longer in Cambridge,” he told the BBC.
Dr Hauser believes that Arm should be offered protection as part of the government’s strategy to champion the UK’s wider microprocessor sector. He would like it listed on the London and New York Stock Exchanges.
Nvidia and Arm were both approached and both declined to comment.