Cambridge-based computer chip designer ARM Holdings will be sold to American firm Nvidia in a deal valuing ARM at $40 billion.
ARM creates chip designs licensed out to Apple, Samsung, Huawei and Qualcomm, and its technology is found in most smartphones.
As part of the deal, Nvidia has promised to keep ARM’s business based in the UK and to hire more staff.
Nvidia added that the deal would create “the premier computing company for the age of artificial intelligence”.
“ARM will remain headquartered in Cambridge,” said Nvidia chief executive Jensen Huang.
“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,” Huang added.
Aside from ARM’s commitment to stay in the UK, its co-founders have raised other concerns over the acquisition by a US firm.
Co-founders Hermann Hauser and Tudor Brown have said there is now a possibility of a conflict of interest for ARM’s clients, who would become dependent on a business with which many also compete for sales.
They also raised speculation that once ARM was owned by an American firm, the US government could try to block Chinese companies from using its knowledge as part of a wider trade disputes between the countries.
“If ARM becomes a US subsidiary of a US company, it falls under the CFIUS [Committee on Foreign Investment in the United States] regulations,” said Hauser on BBC Radio 4’s Today programme.
“[That] means that if hundreds of UK companies that incorporate ARM’s [technology] in their products, want to sell it, and export it to anywhere in the world including China – which is a major market – the decision on whether they will be allowed to export it will be made in the White House and not in Downing Street,” Hauser added.
CFIUS is the same committee currently investigating TikTok owner ByteDance’s potential deal with Oracle to avoid being banned in the US.
Hauser also said he believed the pledge to retain and increase the number of UK jobs was “meaningless” unless UK ministers stepped into to enforce it.