Wednesday, December 8, 2021

NVIDIA’s deal to acquire Arm Ltd called for an in-depth phase 2 investigation by United Kingdom’s CMA

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NVIDIA is a leader in the market of graphic cards and is undoubtedly the most beloved graphics designer in the market as well in the crypto mining community. However, the company continues to face substantial regulatory resistance when it comes to its acquisition plans for the British chip designer, Arm Ltd.

According to a statement released by UK’s Competition and Markets Authority (CMA), the deal entails serious competition concerns:

“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). Arm’s IP is used by companies that produce semiconductor chips and related products, in competition with NVIDIA.”

The CMA even went as to note that the reduced competition could “stifle innovation across several markets, including data centres, gaming, the internet of things, and self-driving cars.”

However, the CMA also further stated that NVIDIA has offered a behavioural remedy to counter competition concerns, but still, the CMA has concluded in their report that there is a further need for an in-depth phase 2 investigation.

As we know, NVIDIA is supposed to close the Arm acquisition deal by September 2022, however, if it fails to do so, then Japan’s SoftBank Group, which currently owns Arm, will win the right to retain $1.25 billion as a breakup fee. But, NVIDIA is smart enough to understand the importance of the deal and has already paid this amount to SoftBank as a down payment.

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But it’s now just the U.K that’s troubled by NVIDIA’s acquisition of Arm, the graphics designer is also facing hurdles in China, where Huawei Technologies Ltd. has reportedly raised concerns that its access to Arm’s IP might be hampered by the deal. This is understandable as the US and China currently have the biggest tech ongoing rivalries in the world, with the US administration continuously blocking the access of Chinese tech giants from US technologies.


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Avatar of Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.


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