Nvidia-Arm deal under investigaton by UK watchdog

The UK’s competition watchdog has launched an investigation into Nvidia’s acquisition of chip manufacturer Arm. 

The US GPU maker agreed to purchase Arm from the SoftBank Group last year in a $40 billion deal, but there have long been concerns that industry regulations could ultimately prevent the acquisition from closing.

Now, the UK’s Competition and Markets Authority (CMA) has confirmed that it will scrutinize the takeover, with concerns mounting that it will damage competition in the computer chip manufacturing space. A formal Phase 1 investigation is scheduled to begin later this year.

“The chip technology industry is worth billions and critical to many of the products that we use most in our everyday lives,” said Andrea Coscelli, chief executive of the CMA. “We will work closely with other competition authorities around the world to carefully consider the impact of the deal and ensure that it doesn’t ultimately result in consumers facing more expensive or lower quality products.”

An Arm wrestle

Nvidia’s purchase of Arm could potentially have a huge impact on the technology sector, with Arm’s business model currently based on licensing its chips to any vendor.

This means that its technology is used in devices manufactured by a broad range of industry-leading firms, including Apple, Samsung, Huawei, Amazon, and Nvidia. There are concerns, therefore, that a takeover could threaten the open business model that Arm has developed.

From a UK perspective, there are also worries that the merger could result in Arm moving jobs or operations abroad. This did not occur when the company was purchased by SoftBank, with the Japanese company actually expanding the UK workforce, but there are no guarantees that Nvidia would adopt the same approach.

Not long ago, competition-related matters would have been the jurisdiction of the European Commission. However, now that the UK has finalized its departure from the European Union, it will be left to the CMA to make a final decision of the Nvidia-Arm deal.

Via the BBC