The previously announced deal between NVIDIA Corporation (NASDAQ:NVDA) and the UK based Arm expects to face a hurdle. Nvidia entered a pact to acquire Arm for $40 billion, including cash of $12 billion and stock worth $21.5 billion from SoftBank Group Corp (OTCMKTS:SFTBY). Arm’s employees will receive shares worth $1.5 billion, and Softbank can earn $5 billion if Arm achieves performance targets.
Softbank acquired Arm in 2016 for $32 billion. Following the takeover, Jensen Huang, CEO of Nvidia, said the company will retain the headquarters of Arm in Cambridge, England. The company plans to build an AI R&D center and hire local engineers. Nvidia said it takes 18 months to complete the deal and requires regulators’ approval in the US, the EU, and China.
According to predictions published in the ‘State AI’ on Thursday, Nvidia will face roadblocks in concluding the deal in the next 12 months. The deal announced by Nvidia in early September 2020 to acquire the crown of the tech industry in the UK – Arm, which employs 3,000 employees locally and 6,000 worldwide.
Chips of Arm used worldwide
Arm manufactured chips are used widely in electrical devices of prominent companies like Apple (iPhone and iPad) and Amazon (Kindle) besides several million electrical devices, including smartphones worldwide. Even arm chips are used in several cars across the world.
According to a previous communiqué, Nvidia said the acquisition will offer Nvidia and Arm’s enormous benefits, the industry, and customers. It further said the IP portfolio and R&D capacity of the Arm will be turbocharged with the AI and GPU technology of Nvidia.
Daniel Zeichner calls for clear conditions in the deal
The labor opposition party in the UK said the acquisition deal is not in the public’s interest and questioned why the ruling CP (conservative party) fails to protect Arm. Daniel Zeichner, the labor lawmaker, on September 21, 2020, demanded the government to include clear conditions in the takeover bid of Arm by Nvidia.
Daniel wanted legal for the jobs in Arm and retained the business model and defend the UK’s tech sovereignty. Accordingly, the deal between Santa Clara, California-based Nvidia, and Arm could be halted either by CMA (Competition Markets Authority) or the UK government.