Rogue Arm China CEO says failed Nvidia buyout bid ‘could be a better path for Arm’

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on telegram
Telegram
Share on email
Email

In an interview with JW Insights (thanks Tom’s Hardware), embattled CEO and chair of Arm China, Allen Wu, said that the failure of Nvidia’s $40 billion bid to buy Arm was a good thing for the company and the chip industry. UK-based chip maker Arm currently has plans to go public, which could be a rough road due to the public legal drama around Arm China. After an internal investigation determined that Wu failed to disclose conflicts of interest, he was voted out, but remains in charge for the time being due to a legal loophole. Arm owns 49 percent of Arm China.

Nvidia stepped away from the Arm acquisition in February because of “significant regulatory challenges,” according to a press release sent by the company. Those challenges include a 2021 lawsuit filed by the US Federal Trade Commission against Nvidia, which alleged that the takeover would make the company too big and powerful and would stifle competition. The UK also investigated the deal.

“Most industry players believe that it is most beneficial for industrial development if Arm remains an independent company,” said Wu about the failed acquisition. “And thus, the regulatory authorities will get tighter and tighter, particularly on large chip acquisitions, so I think large-scale M&A (mergers and acquisitions) will be more and more difficult.”

Arm has accused Wu of misusing company money to finance his ongoing legal battles. He remains CEO of Arm China despite his firing by exploiting a centuries-old legal loophole  which has involved camping out in his office for over a year and controlling the company’s seal.

Wu suggested that Chinese tech companies look into spinning off their businesses as joint ventures, which is how Arm China was formed, allowing it to keep all of its technical and patent licensing from Arm. 

Wu ended the interview with an optimistic tone on the Arm’s future.

“I think we all have the same goal,” he said. “We all hope that technology will boost development in human society. I think the process of M&A must be more difficult than it was, and the communications need to be carried out earlier and better.”

As Tom’s Hardware points out, the biggest hurdle for Arm to go down the IPO route is Wu himself. Around 20% of Arm China’s finances can’t be audited due to how Wu is running the company. This is a big red flag for regulators, especially if there is already a whiff of any financial impropriety.

Article source: PCGamer

You might also enjoy