Home 360TECHNOLOGY Tech Tent: ARM, TikTok and the battle for tech supremacy

Tech Tent: ARM, TikTok and the battle for tech supremacy

Tech Tent: ARM, TikTok and the battle for tech supremacy

By Rory Cellan-Jones
Expertise correspondent

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One has been described because the Switzerland of the chip trade, the opposite is the most well liked new social media phenomenon of latest years.

However each ARM and TikTok are discovering themselves buffeted by the crosswinds of the commerce struggle between the USA and China, and this week’s Tech Tent appears to be like at what that may imply for each corporations.

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When America’s Nvidia and Japan’s Softbank revealed they had brokered a $40bn (£31bn) deal to see the chip giant acquire ARM, there was consternation within the UK tech trade.

Cambridge-based ARM designs chips for a lot of the world’s cell phones and plenty of different gadgets, and might be essentially the most spectacular tech enterprise that Britain has produced within the final 30 years.

Regardless that it was sold to Softbank in 2016, the Japanese agency stored its promise to retain its Cambridge headquarters and increase jobs and funding within the UK. However ARM co-founder Hermann Hauser says a sale to Nvidia will likely be a catastrophe – he believes it’s inevitable the brand new proprietor will wish to run the enterprise from the USA, with dire penalties for employment in locations like Cambridge.

Regardless of the issues within the UK, this deal has raised questions world wide about what it is going to do to the steadiness of energy within the chip trade which is on the centre of our expertise future.

media captionWATCH: Nvidia chief explains why he desires to purchase ARM

ARM’s enterprise mannequin will depend on the belief of greater than 500 prospects who license its chip expertise within the perception they may every get equal entry to improvements. That is why Hermann Hauser calls it the Switzerland of the chip world and why he fears the corporate will lose that belief as soon as it’s within the arms of Nvidia, which has overtaken Intel to change into the largest cheese within the trade.

Analyst Geoff Blaber, of CCS Perception, tells Tech Tent he agrees with that analysis.

“The truth that ARM has been impartial has meant that a complete swathe of licensees has been comfy utilizing its expertise,” he says.

“The second that goes to a competitor, that does threat being compromised.”

Nvidia chief government Jensen Huang informed us he cherished ARM’s enterprise mannequin and expects to supply extra of his firm’s improvements to its prospects.

“The enterprise we purchased is a mix of the folks, the unbelievable structure and the enterprise mannequin that led to this wealthy ecosystem that ARM represents at this time,” he stated.

He insists most of ARM’s prospects are usually not direct opponents of Nvidia so shouldn’t be anxious.

However Geoff Blaber will not be satisfied – he says historical past reveals {that a} licensing enterprise that has two competing pursuits, serving its licensees whereas additionally pushing its personal merchandise, hardly ever works.

“The second these licensees begin to see a long-term menace or opposition in opposition to their core enterprise, they’ll begin taking a look at options.”

This deal additionally faces some main regulatory hurdles – even Jensen Huang concedes it is going to take greater than a 12 months to tie issues up.


However the huge query is about approval from China, a significant buyer of ARM. At a time when the USA has moved to close off Huawei’s entry to any Western chip expertise, the Chinese language authorities is not going to be joyful to see a significant a part of the semiconductor ecosystem come below the management of an American firm which can should obey diktats from Washington.

“They’ve a vested curiosity in retaining the established order,” says Geoff Blaber.

“I would be very stunned if the deal, as it has been proposed, would get by means of scrutiny from China and the regulator there.”

In the meantime the Trump administration has been decided to make sure the USA has a measure of management over TikTok, a much less very important a part of the tech ecosystem, although do not say that to the a whole lot of thousands and thousands of youngsters who like it.

On the time of writing, it nonetheless will not be clear whether or not the US or China will likely be glad with a deal which might see the enterprise software program managing the information from the video platform whereas not solely shutting the Chinese language homeowners out.

However on this contest between the 2 tech superpowers, TikTok is simply the appetiser. The way forward for ARM, the platform on which a lot of the way forward for computing is being constructed, is the principle course.

Associated Matters

  • TikTok

  • ARM Holdings



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