Lord Peter Mandelson has called on the UK to block the planned $40bn takeover of British chipmaker Arm by Nvidia, describing the deal as “short-sighted” and “completely anti-competitive”.
The former business secretary told City A.M. that the acquisition was a “direct threat to our security of supply and sovereignty in the UK and Europe”.
US tech giant Nvidia last month announced plans to buy the Cambridge-based chip firm from Japanese conglomerate Softbank for $40bn.
But the deal is facing scrutiny from MPs and regulators amid concerns about the transferral of British technology into US ownership.
Arm, which designs chips for mobile phones, licenses its technology to firms including Nvidia and Intel. Critics have warned that Nvidia has bought Arm to block its competitors’ access to the company’s products.
Nvidia has said it will retain Arm’s neutral licensing model and has pledged to keep the company headquartered in the UK.
But Mandelson dismissed the guarantees, arguing that the UK should block the deal on competition grounds.
“We all know that guarantees are not worth the paper they’re written on,” he said.
“Once Nvidia has ownership it has control, and once it has control it can determine what Arm does, who it supplies and ensure that it does nothing which Nvidia believes is not in its own corporate interest.”
‘Selling the crown jewels’
The peer also took aim at the government for failing to intervene in the deal, accusing ministers of “waving the Union Jack while selling off the crown jewels”.
“We have precious few technology champions in Britain,” he said. “Yet with Arm it seems the government is prepared to sit back and watch as Nvidia potentially rides roughshod over Arm’s business model and its ability to supply the marketplace as a whole.”
Mandelson added that the laissez-faire approach called into question the government’s plans to create a new ‘Global Britain’.
“If we are so ready to sacrifice Arm, I just do not know where this leads to in the scientific and technology remaking of Britain post-Brexit and post-Covid.”
The government is yet to make a decision on whether or not to refer the takeover to the Competition and Markets Authority.
Darren Jones, chair of the business select committee, yesterday wrote to business secretary Alok Sharma asking for more details about the deal and its impact on jobs and the country’s industrial strategy.
Mandelson, who served as first secretary of state under Gordon Brown, also questioned whether the government would take the same approach if Arm’s suitor were a Chinese company.
“If [Nvidia] were Chinese, the alarm bells would be ringing off the wall,” he said.
“But in American hands, we are vesting huge power not just in Nvidia but in its capricious reach into others’ business affairs and operations.”
The row comes amid growing scrutiny over the sale of major British tech companies to foreign buyers.
Satellite group Inmarsat and aerospace giant Cobham are among the major UK firms to be transferred into foreign ownership in recent months, while concerns have been raised over the influence of a Chinese investor in chip designer Imagination Technologies.