Nvidia’s proposed $40 billion acquisition of UK microprocessor designer Arm has run into more regulatory roadblocks with today’s announcement by a British regulator, the Competition and Markets Authority, that it has “significant competition concerns” with the deal.
The CMA sent a review of its findings to the UK’s Secretary of State for Digita, Oliver Dowden, declaring that Nvidia may stifle competition by curtailing access to Arm IP and “imparing interoperability between related products,” with potential impact on the data center, car software and gaming markets.
Andrea Coscelli, chief executive of the CMA, said in a press release issued today: “We’re concerned that NVIDIA controlling Arm could create real problems for NVIDIA’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets. This could end up with consumers missing out on new products, or prices going up.
“The chip technology industry is worth billions and is vital to products that businesses and consumers rely on every day. This includes the critical data processing and datacentre 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 news means Nvidia will be engaged in a two-front conflict with the CMA, which earlier this month issued a report in which in which it said the deal “contains worrying implications for national security, with the country now leaning towards blocking the deal.”
The deal, in which Nvidia would acquire Arm from Japan-based SoftBank Group Corp., has also encountered regulatory hurdles in China, the U.S. and Europe – along with concerns from rivals and customers, including Google and Qualcomm, regarding Nvidia potential control over key microprocessor IP.
The terms of the acquisition call for the deal to be closed by next March 2022, 18 months after it was announcement last September, but during its quarterly earnings announcement this week, Nvidia CFO Colette Kress conceded that “discussions with regulators are taking longer than initially thought.” The deal allows Nvidia and Arm options to extend the close to September of next year. If approvals have not been secured by then, the companies can cancel the attempted purchase.
