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European Union plans to open formal competition investigation into NVIDIA and Arm’s deal

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In the latest development related to NVIDIAs deal to acquire Arm, the European Commission has opened a formal competition investigation into the deal. Its worth remembering that Nvidia plans to purchase the UK-based company from SoftBank for $40 billion and the deal was initialized in September 2020.

In a recent press release, EU’s Executive Vice President Margrethe Vestager stated that Nvidia buying Arm could make it harder for other manufacturers to access Arm’s technology. This might hurt the semiconductor industry which is already facing supply problems more severely and would restrict NVIDIA’s competition from gaining access to the latest tech in Arm’s arsenal.

At the heart of concerns is Arm’s neutrality since the chip designer licenses its designs to a broad range of companies including Apple, Samsung, and Qualcomm, and most of them compete with each other as well as with Nvidia. There are fears in the market that if Nvidia gains control of Arm it may result in Nvidia’s competitors being put at a disadvantage.

However, Nvidia’s CEO Jensen Huang claims that this won’t happen and has committed to maintaining Arm’s open licensing model. But, many industrial critics of the deal have stated that once the deal is completed regulators won’t be able to force Nvidia to remain neutral indefinitely.

Nvidia has submitted commitments to the EU is trying to address some of these concerns, but the commission decided they were “insufficient to dismiss its serious doubts as to the effect of the transaction.”

To answer the claims of NVIDIA’s competitors, the EU is planning to investigate how the deal could affect the fact of how competitors share information with Arm, and whether Nvidia could change Arm’s research and development funding to make its products more profitable. There are also concerns that NVIDIA might try to detriment its competitors.

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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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