Nvidia Arm Deal In Doubt As UK Launches Deep Probe
US chipmaker Nvidia’s $40 billion USD bid for Arm is on shaky ground, with the UK’s competition regulator voicing “serious concerns” with the deal.
The Competition and Markets Authority (CMA) is launching an in-depth “Phase 2” investigation into the proposed takeover on competition grounds, saying Nvidia buying out Arm would incentivise it to restrict its rivals’ access to Arm’s IP, which is used for creating semiconductor products.
The watchdog says this could stifle innovation in markets such as gaming, IoT, data centres, and self-driving cars, leading to higher prices or inferior products for consumers.
According to Andrea Coscelli, chief executive of the CMA, chipmaking is a vital industry relied upon for everyday products.
“We’re concerned that Nvidia controlling Arm could create real problems for Nvidia’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets.
“This could end up with consumers missing out on new products, or prices going up,” he said.
Nvidia has stood by the deal in a perfunctory statement reported in TechCrunch.
“We look forward to the opportunity to address the CMA’s initial views and resolve any concerns the Government may have.
“We remain confident that this transaction will be beneficial to Arm, its licensees, competition, and the UK,” the chipmaker said.
The buyout, which would see Nvidia acquire Arm from SoftBank for $40 billion USD ($56 billion AUD), has come under intense fire from Nvidia’s rivals as well as Hermann Hauser, a co-founder of Arm, who has called for it to be blocked.