President Trump on Monday blocked Broadcom’s $117 billion bid for the chip maker Qualcomm, citing national security concerns and sending a clear signal that he was willing to take extraordinary measures to promote his administration’s increasingly protectionist stance.
In a presidential order, Mr. Trump said “credible evidence” had led him to believe that if Singapore-based Broadcom were to acquire control of Qualcomm, it “might take action that threatens to impair the national security of the United States.” The acquisition, if it had gone through, would have been the largest technology deal in history.
This US administration would eventually stumble onto doing the right thing – infinite monkeys and all that – so here we are. To explain why this is a good move, Ben Thompson’s article about this issue is a fantastic, must-read explainer.
There is a certain amount of irony here: the government is intervening in the private market to stop the sale of a company that is being bought because of government-granted monopolies. Sadly, I doubt it will occur to anyone in government to fix the problem at its root, and Qualcomm would be the first to fight against the precise measures – patent overhaul – that would do more than anything to ensure the company remains independent and incentivized to spend even more on innovation, because its future would depend on innovation to a much greater degree than it does now.
The reality is that technology has flipped the entire argument for patents – that they spur innovation – completely on its head. The very nature of technology – that costs are fixed and best maximized over huge user-bases, along with the presence of network effects – mean there are greater returns to innovation than ever before. The removal of most technology patents would not reduce the incentive to innovate; indeed, given that a huge number of software patents in particular are violated on accident (unsurprising, given that software is ultimately math), their removal would spur more. And, as Qualcomm demonstrates, one could even argue such a shift would be good for national security.
In USA it’s only a matter of time before it happens anyway. I hope I’m wrong, however, these companies will just dump money into the legalized bribery political system and get it done a year later or under the next administration under the guise of “national security” more likely, which is insane, but that is USA.
Qualcomm buying NXP obviously hasn’t be a “national security” threat. One way logic.
They will? As in is not already happening?
Your seething hate for trump shines through once again. Try to keep it professional. There are people that likes the low unemployment, the low taxes and the chance to live outside govertnment programs again.
LOL, you must be new here.
That vile man is the open laughing-stock of the entire world (sans US).
Far from MAGA, he’s driving you all into the ground, but I don’t care – China and Europe are far more important trading partners. The US can burn.
I can remember a time when I’d see the words
“Not for Sale or Issue in the USA” on many books.
I think that it won’t be long before companies decide to vote with their feet and not trade (import or export) with the USA while the current POTUS is in place.
Sadly, it seems that far too many Americans think there is no civilised (in their opinion) world outside the lower 48.
Nah. Part of being good in business is learning to keep your emotions in check–something people around here could due to learn–and look at the broader picture. At the most, a U.S President will reign for eight years. That’s not that long, in terms of business and, if someone theoretically decided to absent themselves from a market, it would simply give a competitor time to take advantage and get the sales the absent business otherwise would have gotten and, for what? Emotional dislike of one individual? That would be a very stupid thing for a competent business manager to do.
Wait, isn’t that one individual a reflection of the will of the population?
(…so hypothetically one might not want to service such)
Unless the next US President continues down this path, I don’t know how many large businesses will ignore the states completely.
It’s not unlikely that they’ll reduce the levels of product they’re trading, and refrain from issuing particular SKUs to the states, but surely anyone already doing business there will keep the relationships they have with other partners in place, to ramp up again should they become less protectionist.
Yeah, of course certain people will like the low taxes. But people have yet to point out tangible benefits besides enriching the people who are already rich.
But people, including economists, have pointed out the devastating effects of the lowered federal revenues, with ballooning debt, likelihood of inflation, cuts to vital government programs like Medicare and Medicaid, and so on.
Ah, so that’s what judgen means when he says people will enjoy living outside government programs.
Because in his mind, he thinks people (with children) working two part time jobs to make ends meet would love to be in a pile of debt if they get ill or lose one of their jobs.
So this is about patent trolling? If that really is the case this acquisition really should go through.
If an entire industry grinds to a hault because of the American patent system, just maybe things will be done about it.
Man, you guys got me out of lurk mode
I’m really not sure why worldwide opinion matters. Is that supposed to mean something? This is kind of the whole point on why Trump won. Many Americans don’t care. And it’s time to break the paradigm that’s been set in place since the Cold War, where the US played Daddy and was supposed to care about everyone. It’s been running on automatic for no reason, for about 30 years now. There’s no mission anymore, other than globalism for it’s own sake. That isn’t good enough. In fact, it’s disastrous.
You’d think that people who are annoyed about America would be happy about this.
Oh yeah! Qualcomm. I wish these breakups happened more outside tech, actually.