Nvidia’s proposed Arm takeover to be the subject of an EU investigation

27 Aug 2021

Image: © Konstantin Savusia/Stock.adobe.com

The graphics processing unit and system on a chip designer said it would engage with the EU to work through regulatory concerns expressed by several bodies.

California tech company Nvidia’s planned acquisition of UK chip designer Arm will be the subject of an investigation by the EU next month.

The investigation is expected to begin after Nvidia formally notifies the European Commission of its plan to acquire Arm in what is expected to be a deal worth $54bn.

The news comes days after the UK’s Competitions and Markets Authority (CMA) recommended a thorough probe be carried out into the company’s proposed takeover of Arm.

The chipmaker is currently owned by Japan’s SoftBank, which agreed to sell to Nvidia in 2020.

According to the CMA, which began looking at Nvidia’s plan to acquire Arm as far back as April when UK government raised concerns on the grounds of national security, the proposed purchase raised “significant competition concerns”.

Nvidia, which designs graphics processing units for the gaming and professional markets as well as system-on-a-chip units for the mobile computing and automotive market, said it would be “working through the regulatory process” and that it would engage “with the European Commission to address any concerns they may have”.

But according to the CMA, Nvidia gaining control over Arm “could create real problems for Nvidia’s rivals by limiting their access to key technologies, and ultimately stifling innovation” leading to price rises and customers missing out on products.

Arm co-founder Hermann Hauser also expressed concerns about the deal. He said it would give the California company “an opportunity to become the quasi monopoly supplier of microprocessors to the world.”

Prior to the latest development, Nvidia said it remained confident that the deal would go through. However, the statement made by its CFO Colette Kress last week came before today’s news from the EU.

“Although some Arm licensees have expressed concerns or objected to the transaction, and discussions with regulators are taking longer than initially thought, we are confident in the deal and that regulators should recognise the benefits of the acquisition to Arm, its licensees and the industry,” Kress said at the time.

Blathnaid O’Dea was a Careers reporter at Silicon Republic until 2024.