NVIDIA's $40 BILLION Arm Deal Hits New Snag With UK Regulator

RJ Pierce, Tech Times 20 August 2021, 03:08 pm

NVIDIA has been in deep talks to acquire Arm for a massive $40 billion, but the deal still hasn't pushed through due to certain complications. And now, it seems like there's a new one.

In a report by CNBC, the NVIDIA-Arm deal is in further jeopardy after the UK Competition and Markets Authority (CMA) cited so-called "significant competition concerns" about the acquisition. According to the regulator, NVIDIA is severely hampering competition by controlling access to the Intellectual property of Arm, which means that the former's planned deal should be examined even further.

Furthermore, the CMA states that aside from the restrictions on accessing Arm's intellectual property, NVIDIA can also "impair interoperability" among related product lines.

The UK watchdog believes this could potentially lead to a significant decrease in competition in markets such as data centers, gaming consoles, and even car software. However, NVIDIA has been vehement in its response that they won't be changing the British chipmaker's current business model.

This delay is one of many that has hampered the NVIDIA-Arm deal for quite some time now. In fact, some experts believe that the acquisition might have to go down the wire, since the predicted deadline for it to push through is at the end of 2022, writes ArsTechnica.

For now, UK Secretary of State for Digital Oliver Dowden is asking the CMA to write a report on the possible implications of NVIDIA's purchase of Arm, which was first announced back in September 2020.

NVIDIA-Arm Acquisition: What's the Big Deal?

The NVIDIA-Arm deal is big enough to capture the attention of international competition regulators and other tech giants like Google and Microsoft. They all have one thing in common: they're opposing the deal. But what's all the fuss about?

In an article by Forbes, it was revealed that the British chipmaker controls a massive chunk of the semiconductor market, especially for mobile processors and smartphones. Companies such as Apple are mostly opposed to the NVIDIA-Arm deal because they're mostly concerned about whether they're going to get equal access to Arm's tech if the merger pushes through.

This is the same exact reason why the UK CMA is worried about the possible anti-competition implications of NVIDIA's plan. Should they succeed in buying the chipmaker, they will have free rein to take over other tech companies' territories.

It's also worth noting that the NVIDIA-Arm merger proved concerning enough that even the British government intervened, citing issues about national security.

What Makes Arm a Valuable Asset?

The Cambridge, England-based chip-making company has specialized in designing semiconductor architectures for years. Softbank currently owns it after purchasing it for $31 billion back in 2016.

But since then, however, Softbank has experienced several setbacks. Several executives back then expressed disappointment at the group's share performance, and were trying to figure out whether to take the entire group private, according to Reuters.

One thing is for certain though: should NVIDIA successfully acquire Arm, this deal will change the entire landscape of the global semiconductor industry.

This article is owned by Tech Times

Written by RJ Pierce