Qualcomm provides to spend money on Arm as regulators threaten Nvidia deal

Cristiano Amon, President of Qualcomm and Qualcomm CDMA Technologies, answers a question during a panel discussion on 5G wireless broadband technology during CES 2018 in Las Vegas, Nevada, USA, January 10, 2018.

Steve Marcus | Reuters

According to a report in The Telegraph newspaper on Sunday, US chip Goliath Qualcomm has agreed to invest in the British chip designer arm in case the company’s $ 40 billion sale to Nvidia is blocked by regulators becomes.

Qualcomm’s new CEO Cristiano Amon reportedly said Qualcomm would be willing to buy a stake in Arm along with other industry investors if SoftBank, Arm’s current owner, took the company public instead of selling it to Nvidia .

“When Arm has an independent future, you will find that many companies within the ecosystem, including Qualcomm, have a keen interest in investing in Arm,” Amon said, according to The Telegraph. “When it leaves SoftBank and enters the process of becoming a public company, [with] a consortium of investing companies including many of their clients, these are great opportunities in my opinion. “

Amon reportedly added that Qualcomm “would definitely be open to it” and that the company “had discussions with other companies that are similar”.

Qualcomm declined to comment when contacted by CNBC, while Nvidia said an IPO wouldn’t be enough to support Arm’s growth. Arm didn’t respond immediately.

Arm was spun off from an early computer company called Acorn Computers in 1990. The company’s energy-efficient chip architectures are used in 95% of smartphones in the world and 95% of chips developed in China. The company licenses its chip designs to more than 500 companies who use them to manufacture their own chips.

An Nvidia spokesman told CNBC that Arm would need more than one IPO to reach its full potential.

“Arm needs an infusion of new technology that it can make available to Arm licensees everywhere. That’s why we decided to buy Arm,” they said. “Our technologies and Qualcomm’s are a great complement – we would love Qualcomm’s help in developing new technologies and products for the entire arm ecosystem.”

The acquisition of Arm by Nvidia was announced by the companies last September and should take about 18 months. Since then, Qualcomm has told regulators around the world that it is against the deal, as have Microsoft and Google, according to Bloomberg.

The companies speak out against the acquisition as there is a risk that Nvidia could become the gatekeeper of Arm technology and prevent other chipmakers from taking advantage of the company’s intellectual property. They doubt whether Nvidia can take full advantage of the acquisition without blocking access to Arms chip designs.

Nvidia has repeatedly announced that it will maintain Arm’s open licensing model and invest heavily in Arm’s headquarters in Cambridge, UK

But the Federal Trade Commission, the European Commission, the UK’s competition and market regulator and China’s state market regulator are all in the process of investigating the deal.

Arm has a joint venture called Arm China with Chinese private equity firm Hopu Investments. Arm China is headquartered in Shanghai, which means the Chinese Ministry of Commerce and the Chinese state market regulator have the right to review the deal.

Nvidia has been asking Chinese regulators to approve the deal in the past few weeks, according to a Financial Times report earlier this month citing sources familiar with the matter. Nvidia said the regulatory process is confidential but remains confident that it will receive approval and “complete in early 2022”.

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