NVIDIA’s ARM takeover investigated by UK regulator

NVIDIA’s proposed purchase of UK chip designer ARM is facing new roadblocks, after an initial investigation by UK regulators that has lasted several months.

The Competition and Markets Authority released a statement noting that the £29bn deal could stifle innovation in a number of different industries – from self-driving cars to gaming and beyond.

In addition, should the purchase be approved, the CMA is concerned that in addition to reducing innovation in these industries, it could ultimately result in higher-priced, lower-quality products in advanced consumer products technology.

Andrea Coscelli, Chief Executive of the CMA said that the purchase of ARM by NVIDIA could limit access to ARM technologies to NVIDIA rivals. This, she said, could limit “access to key technologies, ultimately stifling innovation across a number of important and growing markets.”

This would not only impact NVIDIA’s competition, but it could also result in “consumers missing out on new products, or prices going up.”

The chip technology industry is critical to the cutting-edge technologies that enterprises and consumers are reliant upon. “This includes the critical data processing and data centre technology that supports digital businesses across the economy and the future development of artificial intelligence technologies that will be important to growth industries like robotics and self-driving cars.”

The acquisition has been subject to an initial investigation by UK regulators for several months. However, the CMA said that the initial investigation did not serve to alleviate serious concerns about the long-term effects on competition. As a result, the CMA is recommending that the NVIDIA-ARM deal be subject to a ‘phase two’ investigation, which will delve more deeply into the potential ramifications of the acquisition.

In defence of the purchase, NVIDIA published a statement that focused on the possible benefits of the acquisition to supporting technological innovation. For example, NVIDIA said, their purchase of ARM will help to expand AI computing throughout the world by combining ARM’s broad customer base with NVIDIA’s GPU and AI technologies. Additionally, NVIDIA says that this deal will accelerate ARM’s opportunities in global markets while improving energy consumption and innovation across industries.

Jensen Huang, CEO and founder of NVIDIA said, “We are buying ARM because we want to advance computing further. The future of computing is going to move further from the cloud to the edge. That is what ARM is fantastic at. Where we are fantastic is AI. So, imagine the possibilities in putting AI at the edge.”

Nvidia said in a statement: “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.”