Collapse of Nvidia’s $40bn acquisition of Arm will protect competition, but SoftBank’s Plan B may backfire on post-Brexit Britain

When SoftBank bought Arm in July 2016 for £24 billion, then-prime minister Theresa May lauded the deal as an early Brexit triumph – but the UK now risks losing the ‘crown jewel’ of its digital sovereignty.

Since the pandemic took hold, supply chains worldwide have been struggling to meet unforeseen demand for the mountains of gadgets and tech products containing the semiconductors that Cambridge-born company Arm designs.

Arm’s integrated circuits and chip designs are used to power everything from electric vehicles to smartphones and games consoles, with the Cambridge firm now the world’s largest producer of semiconductor chips and the ‘crown jewel’ of Britain’s tech landscape.

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Roughly 95 per cent of smartphones worldwide run on Arm’s hardware, with the company estimating it won’t be long before 100 per cent of the world’s shared data will be processed on Arm across devices, data networks and the cloud.

SoftBank has suggested it may bypass the UK's London Stock Exchange to float Cambridge-born semiconductor giant Arm on the US Nasdaq exchange. (Image credit: AP Photo/Koji Sasahara)

So when two giants in the hardware arena looked to merge in a multi-billion dollar deal, tech rivals big and small were understandably concerned at the potential for a struggling market to shrink even further in Nvidia’s hands if it chose to limit competitors’ access to Arm technology.

Japanese tech conglomerate SoftBank and Nvidia, creator of the Graphic Processing Unit powering the colourful displays on our personal hardware, agreed to sell Arm to the US graphics giant for a whopping $40bn (£29bn).

The announcement in September lit the tech and regulation worlds alight, with the UK Government soon stepping in alongside the US and China to call on competition watchdogs to probe the merger on competition and national security grounds.

So Monday’s news of the Nvidia Arm deal termination amid “significant regulatory challenges” will leave big and small tech firms alike breathing a sigh of relief.

But relief for the UK Government and ministers busy citing a new era of Great British tech revival may be short-lived.

To make good on its investment in Arm and recover from the blow of the Nvidia deal collapse, SoftBank has now announced plans to take Arm public by April 2023.

If SoftBank selects the US and its tech-heavy Nasdaq exchange for Arm’s Initial Public Offering over its UK equivalent, Britain’s pledge of a booming post-Brexit tech landscape could appear little more than a flight of fancy.

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