Huawei seeks curbs on Nvidia’s $40bn deal to buy Britain's Arm

Chinese companies, including Huawei, are believed to have expressed concerns to regulators over Nvidia's prosposed $40bn (£31bn) acquisition of Cambridge chip design business Arm.

The firms are concerned that Arm will become a pawn in the US-Chinese struggle for tech supremacy and that sanctions will cut them off from using Arm's technology.

Arm's microchip designs, which squeeze maximum performance out of low power consumption, have made its technology central to most of the world’s electronics, from smartphones to supercomputers.

Several of China's most influential tech firms have been lobbying the State Administration for Market Regulation  lobbying to either reject the transaction or impose conditions to prevent them being blocked from using Arm's chips.

Arm has grown to supply large amounts of the technology industry largely due to its neutrality, becoming the so-called “Switzerland of the chip industry.”

Chinese regulators could introduce conditions on the deal which would require Arm to continue to supply designs to Chinese businesses despite its parent company being headquartered in the US.

Concerns over Arm designs are particularly pressing for Huawei which saw its access to American chip design software cut off due to new US sanctions introduced this year. The impact of these new sanctions has caused uncertainty about Huawei’s ability to manufacture its own chips and contributed to the Government’s decision to block Huawei kit from the country’s 5G networks.

Arm and Nvidia have both signalled that they expect the deal to obtain regulatory approval, with Nvidia’s chief executive Jensen Huang insisting that Arm will be unaffected by the trade war because its intellectual property will still be British.

“As soon as we explain the rationale of the transaction and our plans, the regulators around the world will realise that these are two complementary companies,” Mr Huang said at Arm’s developer conference earlier this month. “The two companies being complementary when combined will create new innovations, which is good for the market.”

Chinese regulators have previously taken a close interest in chip industry acquisitions. US-headquartered Qualcomm abandoned its $44bn purchase of Dutch rival NXP Semiconductors in 2018 after Chinese regulators declined to approve the deal.

A Huawei spokesman declined to comment.