Nvidia’s USD 40 Billion Takeover Plan Of Arm Faces Delays As UK Regulators Calls For Probe

Competition and Markets Authority (CMA) of the United Kingdom has raised some serious antitrust concerns about Nvidia Corp.’s proposed takeover of chipmaker ARM Ltd. The deal to takeover ARM is expected to be worth USD 40 billion. British regulators are in the favour of a longer probe to ascertain how much harm the deal can cause to the competition. Commenting on the proposed deal, the major antitrust watchdog said that it could allow the technology company to disrupt its rivals’ access to some of the most power-efficient designs of the chip designer. Chips designed by ARM are widely used in a range of technologies. Nvidia is planning to purchase ARM from SoftBank Group of Japan. The development raised several eyebrows even during the initial phase. Some of its rivals like Qualcomm and Alphabet raised antitrust concerns. They fear that the American multinational technology company might control licenses of essential chip technology of ARM.

The initial assessment has been published by the government and it will now decide whether an in-depth probe is required or not. The summary of the report submitted by the CMA says the deal would have the ability to harm competitiveness. The CMA has apprehensions that the deal could ultimately stifle innovation across several markets. This would result in more expensive or substandard products for consumers and businesses. The CMA has rejected some behavioral remedies offered by Nvidia. However, the CMA has recommended that there should be a ‘Phase 2’ investigation into the proposed deal. Commenting on it, the Chief Executive Officer of the Competition and Markets Authority said that they are concerned as the deal could create some real problems for rivals of Nvidia. “There could have been some serious concerns. The deal could stifle competition and as a result, there would not be enough new products for consumers,” he said.

“This industry is worth billions and is very crucial for businesses that are very important to products on which consumers rely for day to day things. Data center technology and critical data processing are some of them. This also includes the development of AI technologies. This is the most crucial thing for self-driving cars and the robotics industry. When asked to comment on the CMA’s stand on the in-depth probe, Nvidia said that it is ready to address every concern of the government. “We strongly believe that the deal would be beneficial not only for ARM but also for its licensees and the entire country.” It would take at least four months to complete a so-called phase 2 investigation. Also, it is most likely to get an 8-week extension.