Nvidia’s acquisition of Arm throws company into tech spat between US and China, analysts say

Arm’s blueprints for powering chipsets are a critical component for many Chinese smartphone makers and AI firms

Nvidia’s US$40 billion acquisition of the chip designer is set to catapult it into the fray of geopolitical tensions between Beijing and Washington, experts say

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Arm’s blueprints for powering chipsets are a critical component for many Chinese smartphone makers and AI firms. Photo: AFP

Published: 10:14am, 15 Sep 2020Updated: 10:04pm, 15 Sep 2020

Nvidia Corp’s US$40 billion acquisition of chip designer Arm is set to catapult it into the fray of geopolitical tensions between Beijing and Washington, analysts and lawyers say.

Arm’s blueprints for powering chipsets are a critical component for many Chinese smartphone makers and AI firms and China is expected to take a dim view of an American company having so much sway in an industry it has prioritised in its battle for tech supremacy with the United States.

“Anything that creates more concentration in the industry to the benefit of a US company, I would think that’s not aligned with what China wants, said Art Dicker, director at Shanghai-based R&P China Lawyers.

China’s State Administration for Market Regulation, which has to give the go-ahead for the deal alongside other regulators globally, did not respond to a request for comment.

Shares of Nvidia rose 7.6 per cent on Monday following the announcement.

Stewart Randall, who tracks China’s chip sector at Shanghai-based consultancy Intralink, said that the acquisition, one of the largest semiconductor takeovers ever, will prompt many Chinese chip makers to look for and develop alternatives to Arm, which is being sold by Japan’s SoftBank Group.

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