US-based Nvidia hopes to get approval for EU antitrust law for the controversial Cambridge acquisition of Arm early next month, according to a report from the Financial Times.
In September 2020, Nvidia announced a deal to acquire Arm Holdings for $40 billion, pending regulatory approval. The arm is one of the most influential companies in the UK and is responsible for designing the industry-standard chip architecture found in every category of computing equipment and used by 70 percent of the world’s population. It was bought in 2016 by SoftBank, of which Nvidia hopes to buy a 90 percent stake.
Now the European Commission is preparing to investigate the acquisition due to competition concerns. According to The Financial Times, Nvidia plans to formally notify the EU of its intention to buy Arm in the first week of September.
Two sources told the newspaper that this will lead to an investigation into the sale, starting with a preliminary assessment of 25 working days. Since Nvidia is unlikely to make any concessions during this review, it will likely be followed by a full 90-day investigation led by the European Commission.
Reuters previously reported that Nvidia may not meet the March 2022 deadline for closing the deal, as European regulators are reluctant to consider the matter until after the summer break.
News of the deal raised concerns that Arm’s independent and neutral business model, based on open licenses, could be jeopardized by the acquisition. Nvidia is the world’s largest maker of graphics and AI chips.
SoftBank’s purchase of Arm was not as controversial, as SoftBank had no significant presence in the semiconductor industry and thus posed no threat to Arm’s business model. SoftBank has also made a legally binding promise to retain Arm’s UK headquarters for at least five years; there are concerns that Nvidia could circumvent a similar agreement.
Earlier this year, digital secretary Oliver Dowden intervened in the proposed acquisition, citing national security concerns. He called on the competition regulator to prepare a “phase one” report on the impact of the acquisition. The regulator, the Competition and Markets Authority, concluded last week that the acquisition could stifle innovation by limiting Nvidia’s rivals’ access to Arm’s technology. It said the acquisition raises competition concerns in markets including data centers, gaming, and autonomous vehicles, and recommended an in-depth investigation.
Nvidia says it has the support of Arm customers, including MediaTek, Marvell, and Broadcom. A spokesperson said: “This transaction will be beneficial to Arm, its licensees, the competition, and the industry. We are going through the regulatory process and look forward to working with the European Commission to address any concerns.”