Nvidia’s ARM Acquisition To Face Lengthy Inquiry In UK: Report

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The deal will be assessed by regulators around the world, following which Britain’s Competition and Market’s Authority (CMA) found that it could lead to “significant competition concerns.”

Tech company Nvidia Corp’s plans to acquire chipmaker ARM for $40 billion is set to go through a lengthy inquiry. This comes after a UK regulator found the purchase by the U.S. group could hit competition and weaken rivals.

The deal, which was struck in September last year, had worried Arm’s other clientele in the data centre market that Nvidia’s could get early access to Arm’s technology with the acquisition.

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However, Arm had dismissed these claims saying that all its customers have the same access to its property, regardless of other alliances.

In Britain, it has also become politically charged, with critics arguing that a rise in economic nationalism and greater awareness of the importance of infrastructure ownership means ARM, owned by Japan’s SoftBank since 2016, should not be sold again.

The deal will be assessed by regulators around the world, following which Britain’s Competition and Market’s Authority (CMA) found that it could lead to “significant competition concerns”.

Even as Nvidia offered remedies to lessen the impact, the CMA said, “[We] found that the merger should be progressed to an in-depth Phase 2 investigation on competition grounds.”

The government will give its fuller response at a later date, which will also include its thinking on any impact on national security. It could refer the deal for a full in-depth inquiry which takes around 24 weeks.

Britain’s government could then block the takeover, approve it or allow it to pass with certain undertakings.

ARM is a major player in global semiconductors, a sector fundamental to technologies from artificial intelligence and quantum computing to 5G telecoms networks.

Semiconductors also underpin critical infrastructure in Britain and the government has said they are in technology related to defence and national security matters.

The deal sparked anger in the semiconductor industry, where Arm has long been a neutral player licensing key intellectual property to customers who are otherwise intense rivals, including Qualcomm Inc, Samsung Electronics Co Ltd and Apple Inc.

Earlier in April, Nvidia Corp had revealed that it plans to make a server processor chip- ‘Grace’- using Arm Ltd’s technology.

The CMA said it was concerned that the merged business would have the ability and incentive to harm the competitiveness of Nvidia’s rivals by restricting access to Arm’s intellectual property.

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