October 16, 2021

British market watchdog wants in-depth investigation into acquisition of Arm by Nvidia

The British market watchdog Competition and Markets Authority concludes that the acquisition of Arm by Nvidia could be anti-competitive. On that basis, the ministry concerned can order a more intensive investigation. No final decision has been made yet.

Nvidia's takeover of Arm raises serious concerns, says watchdog

The CMA claims in the report that Nvidia’s competitors rely on access to the Arm instruction set architecture, processor architecture developed by Arm Limited. Arm issues licenses to third parties and that would become more expensive or less accessible due to the acquisition. Companies widely use CPUs, GPUs and SOCs based on Arm’s architecture for data centers, IoT, the automotive industry and gaming consoles, among others.

For that reason, the market watchdog believes that further development and innovation within those industries may ultimately be hindered, as Nvidia’s competitors in those sectors may be hindered from accessing ARM-licensed CPU technology. This in turn would create a real chance of “substantially reduced competition, with the result that innovation is hampered and products are more expensive or of lower quality”.

Based on the CMA’s conclusion, the Department for Digital, Media, Culture and Sport should decide whether the CMA should initiate a more in-depth “Phase 2” investigation. Nvidia had initially planned 18 months for the legal process associated with such a takeover. Now CEO Jensen Huang tells the Financial Times (paywall, via ArsTechnica ) that more time is needed to close the deal. The ministry in question does not have a deadline for making a final decision on the acquisition, it says on the official government website , but must give a decision within a reasonable time frame to limit uncertainty among the companies.

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The original investigation was formally launched in April and concluded on July 20, although it was not published until today. Nvidia announced the $40 billion acquisition in September of 2020. Although the company says it is confident that everything will be fine, there have been indications for some time that the British government is against the takeover . The next step now seems to be a more in-depth investigation, after which a final judgment is finally made.