China to ruin NVIDIA-Arm deal, analysts say

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Last updated on December 8th, 2022 at 02:29 pm

China to ruin NVIDIA-Arm deal, analysts say

Calls to block NVIDIA’s takeover of Arm have come from both the UK and China. The first is afraid of losing jobs and “technological sovereignty”, the second – access to Arm architectures as a result of US sanctions. Many analysts are convinced that the Chinese authorities will be forced to block the deal.

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The Chinese regulators have gained the right to express their opinion on this deal not only due to the significant distribution of processors with Arm architecture in the local market. The British developer in China has a joint venture with a private investment company Hopu Investments. Arm China is headquartered in Shanghai and has recently become involved in a raider takeover scandal.

Arm architecture is used by 95% of the smartphones offered in the world, a similar share among processors developed in China. Experts believe that the acquisition of control over Arm by the American company NVIDIA, sooner or later, will bring the activities of the first under the influence of US laws, and then, at the slightest complication in relations with the PRC, access to Arm developments for local clients may fall victim to political games.

Analysts at Gartner, for example, point to the inevitability of the emergence of requirements from the PRC to provide Chinese customers with access to Arm developments after the deal with NVIDIA is concluded, but the American company is unlikely to be able to provide such guarantees. Talking about them is one thing, but another thing is to document the corresponding obligations with the threat of applying sanctions if they are not met. CCS Insight specialists are also inclined to believe that the deal between NVIDIA and Arm will stumble on the position of Chinese regulators. While representatives of Arm, NVIDIA, and SoftBank express confidence that the deal will be approved, but in the allotted 18 months for approval, a lot can change.

Also Read:   ARM co-founders fear NVIDIA takeover
 
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