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China to ruin NVIDIA-Arm deal, analysts say
Calls to block NVIDIA’s takeover of Arm from both UK and Chinese sides. 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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Chinese regulators gained the right to express their opinion on this deal not only because of the significant distribution of processors with Arm architecture in the local market. British developer in China has a joint venture with private investment company Hopu Investments. Arm China is headquartered in Shanghai and recently embroiled in a raider takeover scandal.
Arm architecture is used by 95% of the smartphones offered in the world, the same share of the architecture is among the 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 former under the influence of US laws, and then, with the slightest complication of 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 demands from the PRC to provide Chinese customers with access to Arm developments after a deal with NVIDIA is concluded, but the American company is unlikely to be able to provide such guarantees. Talking about them is one thing, and another thing is to document the corresponding obligations with the threat of applying sanctions if they are not met. CCS Insight experts 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 18 months allotted for approval, a lot can change.