March 1, 2024
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EU has recently opened a formal investigation into Nvidia’s acquisition of chip designer Arm. In September 2020 Nvidia announced that its has acquired Arm a UK-based chip designer company from SoftBank for $40 billion.

In a press release, the EU’s Executive Vice President Margrethe Vestager said that Nvidia’s acquisition of Arm could make it harder for other manufacturers to access Arm’s technology, hurting much of the semiconductor industry.

Arm licenses its chip designs to a broad range of companies including Apple, Samsung, and Qualcomm, many of which compete with one another and Nvidia. There are fears that having Nvidia control Arm may result in Nvidia’s competitors being put at a disadvantage.

Nvidia’s CEO Jensen Huang says this won’t happen and has committed to maintaining Arm’s open licensing model.

But critics of the deal fear that regulators won’t be able to force Nvidia to remain neutral indefinitel. According to the EU’s press release, Nvidia submitted commitments to try to address some of these concerns, but the commission decided they were insufficient to clearly dismiss its serious doubts as to the effect of the transaction.

The EU also plans on investigating how the deal could affect how competitors share information with Arm, and whether Nvidia could change Arm’s research and development funding to make its products more profitable, to the detriment of those that use Arm’s other tech.

Both Nvidia and Arm have been expecting regulatory investigations like this and anticipate that the deal could take 18 months to complete. The EU’s investigation is unlikely to be the only regulatory scrutiny the deal faces either. 

According to the Financial Times, regulators in the US and China could also take a formal look at the deal.

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