• A world-beating, oven-ready, cloud-to-edge AI behemoth in the making, says buyer
• "A disaster for Britain," says ARM co-founder
• Softbank paid mostly in Nvidia shares
• No binding commitments on jobs or independence, but Nvidia will "do something that makes sense"... To whom is another matter

Softbank has agreed to sell its UK-headquartered ARM Holdings computer chip company to US company Nvidia for $40 billion. The Japanese conglomerate bought ARM for $32 billion back in 2016, so it has made a buck or two on the deal, which was forced upon it as it tries to reset itself and restore its tattered balance sheet and credibility after the farrago that was its acquisition of the chimera, WeWork.

Masayoshi Son of Softbank ploughed billions of dollars into WeWork and when that company was later forced to abort its much-trumpeted IPO, Wall Street characterised the debacle as "an implosion unlike any other in the history of startups". It was also seen as prime facie evidence that Mr. Son's famous "Midas Touch" had transmuted into a leaden embrace: He has been struggling to recover his golden mojo ever since.

A British success story until it fell into Softbank's gaping maw four years ago, ARM powers billions of smartphones around the world, as well as many other edge devices. ARM's business model is to create CPU architecture designs that other organisations -- including Apple, Qualcomm, Samsung and (significant this) Huawei -- customise for their own purposes. It's also worth noting that ARM has a lucrative but troubled 49/51% joint venture with Hopu Investments of Shenzhen, China, that might now come under intense scrutiny: The US authorities are not at all keen on technology relationships between US and Chinese companies and the British authorities have shown a willingness to kowtow to the whims of US state departments, with the UK government having already caved-in to political pressure from the Trump administration to disallow Huawei hardware and software from being used in the country's nascent 5G networks. It's hard to imagine a US-owned, UK-headquartered company is going to have much autonomy on decisions about how its tech is used by  international exporters. 

Meanwhile, Nvidia, which has its headquarters in California, does make its own chips and so the stage is set for potential trouble to come if/when the deal goes through. Softbank had promised that ARM's HQ would stay in Britain until at least September 2021: Now, ARM's prospective new owner, Nvidia's Taiwanese founder Jensen Huang, has pledged that ARM will remain headquartered in the UK, that it will employ more British workers and that the brand will remain untouched, but has said nothing about the status quo remaining in situ post this time next year.

Commenting on the acquisition this morning during a webcast presentation, Nvidia's head of corporate communications said the deal will create "the premier computing company for the age of artificial intelligence." Huang noted: "ARM will remain headquartered in Cambridge. We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields."

However, during the lengthy webcast, executives including Huang and ARM's CEO Simon Segars fudged and smudged questions about Nvidia making legally binding commitments to carrying forward the pledges Softbank made to the UK government in regard to maintaining jobs and presence in the UK.

Admitting that negotiations with the British government "have only just started," Nvidia is "open-minded" about talks and stated that "we'll do something that makes sense." In other words, there's nothing in writing, no binding commitments have been made, and words are cheap. The legal pledges made by Softbank will almost certainly be kept until the deal closes, which Huang says will take at least a year, possibly 18 months, but after that circumstances "could" change.

Hermann Hauser, co-founder of ARM, believes they certainly will and has already gone on the record to say the deal "will be a disaster for Britain," that the promise to keep and even expand the number of British jobs is "meaningless and will turn the country into 'a vassal' of the US." He added, "If ARM becomes a US subsidiary of a US company, it falls under the Cfius (the Committee on Foreign Investment in the United States) regulations". Thus, if hundreds of UK companies that incorporate ARM products in their devices want to sell, and export, their output to anywhere in the world, including China - a major market - "the decision on whether they will be allowed to do so will be made in the White House and not in Downing Street," Hauser told the BBC.

Let us remember that the majority of the British electorate voted to leave the EU "to take back control" and to ensure that the country would not become a vassal state of the European Union, as government Brexiters assured us it would be if we stayed in the Union. Now, as the transition period for negotiating a trade deal with our former partners winds down amid rancour, brinkmanship and sabre-rattling, it would be mightily ironic if we instead become a vassal state to the US, whose president promised a "massive and easy" trade deal with Britain (which shows no signs of materialising).