Nvidia-Arm takeover raises "serious concerns"

An ARM-Branded Processor
(Image credit: ARM)
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The UK’s Competition and Markets Authority (CMA) has completed its initial investigation (opens in new tab) into the planned $40 billion purchase (opens in new tab) of UK chip designer Arm, by US-based specialized computing major, Nvidia (opens in new tab), and has raised competition concerns. 

Concerns about the takeover were immediately raised by several licensees of Arm’s intellectual property (IP), particularly by those who directly competed with Nvidia. 

In response, the UK government, earlier this year in April instructed the CMA to begin a Phase One investigation (opens in new tab) into the deal, to flag any potential competition concerns. 

“The CMA has determined that an in-depth investigation into the deal between Nvidia and Arm is warranted on competition grounds,” notes a summary (opens in new tab) of CMA’s executive report at the conclusion of its Phase One investigation.

On to Phase Two

Nvidia has reportedly suggested several remedies to get the deal approved by the UK regulators, but the CMA doesn’t think the company has done enough to alleviate its concerns.

The CMA said it was worried the deal would stifle innovation in several areas, such as data center, gaming, Internet of Things (IoT (opens in new tab)) and self-driving cars, and called for a more in-depth investigation into the takeover.

“Should the deal go ahead, the CMA is concerned that the merged business would have the ability and incentive to harm the competitiveness of Nvidia’s rivals by restricting access to Arm’s intellectual property (IP),” adds the CMA, calling for the deal to be further scrutinized in a Phase Two investigation, specifically on competition grounds.

Despite the takeover being subject to various other international regulators as well, including the US Federal Trade Commission (opens in new tab), Nvidia’s  CEO Jensen Huang is confident that the deal will eventually get the green flag (opens in new tab).

"We look forward to the opportunity to address the CMA's initial views and resolve any concerns the government may have," a Nvidia spokesperson told the BBC.

Via BBC (opens in new tab)

With almost two decades of writing and reporting on Linux, Mayank Sharma would like everyone to think he’s TechRadar Pro’s expert on the topic. Of course, he’s just as interested in other computing topics, particularly cybersecurity, cloud, containers, and coding.