Thread by @ByRobDavies

Arm Holdings isn't a high profile company but it is a British business that can genuinely be described as world-leading. Its tech is used in the vast majority of smartphones, as well as computers, video game consoles and much more... [1/12] theguardian.com/business/2020/…

Since 2016, it has been owned by Japanese firm SoftBank, which pretty much treated it as an investment and left Arm's semiconductor boffins to work their magic. Having spent $32bn on Arm, SoftBank is selling for $40bn to US firm Nvidia. $8bn in four years, not bad. BUT [2/12]

The government is under pressure to "call in" the deal for examination, to see whether it ought to be blocked. Ministers can nix deals for reasons of national security, media plurality, financial stability and (as of this year) effect on pandemic response. [3/12]

Of those options, national security is the only one you could go for if you really wanted to stop this deal. Arm supplies the defence industry. But those who oppose the takeover, or are sceptical of it, have other concerns. [4/12]

Labour are worried about jobs and intellectual property being drained out of the UK and want indefinite, legally-binding assurances from Nvidia that they won't do that. Nvidia have made some vague noises about this but nothing concrete yet. [5/12]

Prospect, the science and tech union, says much the same thing. But there are some other high-stakes issues at play here. For instance, rival chipmakers are worried about the future of Arm's model of licensing its world-beating tech to anyone who wants it. [6/12]

If Nvidia decided to keep the next generation of Arm chips to itself, that would punch a huge hole in its rivals plans. Nvidia is saying it won't do this but the temptation will be there. Good FT read on that here. [7/12]
ft.com/content/2d0565…

Arm's co-founder Hermann Hauser is probably the most virulent opponent of the takeover and has cited Arm's "Switzerland" status (i.e. neutrality) as a huge concern. He has others though and UK ministers may want to listen to them. [8/12]

As he told the Guardian, if Dom Cummings wants to build trillion-dollar British tech giants (as he told DCMS officials he did) you do that by boosting success stories like Arm, not with pie-in-the-sky schemes to conjure them out of thin air. [9/12]
theguardian.com/business/2020/…

Hauser also points to the power of Arm as a negotiating chip in upcoming post-Brexit trade talks. If Arm is US-controlled then that power is ceded to President Trump, he says. What's worse, US CFIUS regulations mean the White House could meddle in who Arm sells to. [10/12]

I think I'm right in saying that the UK government has never used its powers to block a foreign takeover. As yet, culture secretary Oliver Dowden hasn't even called this one in for a review. DCMS was still considering it when I rang this morning. [11/12]

The Arm sale may not be the most glamorous rolling news story out there right now but it is important and the outcome will tell us something about the Johnson government's industrial strategy. Worth keeping tabs on. [12/12]