Nvidia, a multinational technology company based in the United States, has stated that it will respond to “any concerns” highlighted by the European Commission, as regulators prepare to open an investigation into the company’s proposed $54 billion (£39 billion) acquisition of British chip creator Arm. The world’s largest maker of graphics and artificial intelligence processors is anticipated to notify the commission of its plan to buy Arm in early September, at which point authorities will likely conduct a preliminary review.
After the UK’s Competition and Markets Authority stated its initial evaluation of the purchase found “serious competition concerns” and that a set of remedies proposed by Nvidia would not be enough to resolve them, Brussels announced its probe.
The UK watchdog is concerned that the purchase may “stifle innovation across a range of markets,” notably by giving Nvidia the potential to harm competitors by restricting access to Arm’s technologies. In September of last year, Nvidia announced its intention to purchase the UK chip designer from SoftBank, a Japanese investment group.
Rival chip companies, on the other hand, have raised concerns about the transaction, pointing out that Arm’s chip designs are widely licensed in the industry and that Nvidia would have the capacity to prevent rivals from utilizing Arm technology, something the US firm has rejected.
The CMA recommended that the proposal be thoroughly investigated, although the UK may opt to prohibit the takeover on national security grounds. The European Commission stated that the agreement had not yet been communicated to the EU.
According to Nvidia, “This transaction will be beneficial to Arm, its licensees, competition, and the industry. We are working through the regulatory process and we look forward to engaging with the European Commission to explain the transaction and address any concerns they may have.”
Nvidia’s revenue in the previous financial year was $16.68 billion, up from $10.92 billion in 2020.
According to a representative for the commission, “We have no specific comment. This transaction has not been formally notified to the commission. If a transaction has an EU dimension, it is always up to the companies to notify it to the commission.”
