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Google, Microsoft and Qualcomm Protest Nvidia-Arm Acquisition

On the heels of an announcement by Arm Holdings yesterday that its silicon partners in the third quarter of 2020 shipped 6.7 billion Arm-based chips, news stories from CNBC and Bloomberg report that Google, Microsoft and Qualcomm are filing complains to U.S. antitrust regulators about Nvidia’s intended acquisition of Arm from Softbank for $40 billion, announced last September.

It also follows news last month that the acquisition is under investigation by the UK’s Competition and Markets Authority (CMA).  The deal also will have to be approved by regulators in the EU and China, a process expected to last about 18 months.

While all three companies have asked U.S. regulators to intervene in the deal, at least one of them has asked that the acquisition be killed altogether, according to the Bloomberg report, which was based on anonymous sources.

“U.K.-based Arm is known as the Switzerland of the industry because it licenses chip designs and related software code to all comers, rather than competing against semiconductor companies,” Bloomberg reported. “The concern is that if Nvidia owns Arm, it could limit rivals’ access to the technology or raise the cost of access.”

On its behalf, Nvidia said in a statement: “As we proceed through the review process, we’re confident that both regulators and customers will see the benefits of our plan to continue Arm’s open licensing model and ensure a transparent, collaborative relationship with Arm’s licensees. Our vision for Arm will help all Arm licensees grow their businesses and expand into new markets.”

The acquisition would diversify Nvidia’s growing and formidable position in HPC. Its GPU processors help power the second and third most powerful supercomputers, Summit and Sierra, according to the Top500 ranking of the world’s most powerful systems, along with 50 percent of the new systems on the latest Top500 list, according to Nvidia. In addition, last year, Nvidia completed the acquisition of high performance networking gear provider Mellanox for $7 billion.

Coupled with the attainment of Arm-powered Fugaku as the world’s no. 1-ranked system, Nvidia’s Arm purchase would be another step in the execution of its ambitious strategy to accelerate computing in any technology sector it participates in, including gaming, autonomous vehicles, IT, AI, scientific computing and HPC. And it would provide Nvidia with a CPU it could potentially tightly integrate with its GPUs within future Nvidia supercomputers.

At the announcement of the planned acquisition, Nvidia CEO Jensen Huang said Arm will remain headquartered in Cambridge (UK), adding that “We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields. And, to attract researchers and scientists from the U.K. and around the world to conduct groundbreaking work, Nvidia will build a state-of-the-art AI supercomputer, powered by Arm CPUs.”

The Bloomberg report stated that mergers like Nvidia-Arm “are typically seen as less worrisome in the eyes of antitrust enforcers because the companies don’t compete head to head. But that view has come under fire from advocates of more aggressive antitrust enforcement who say regulators have downplayed the competitive harm from such deals.”

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