The UK Competition & Markets Authority (CMA) says the deal “raises serious competition concerns” and warrants a more details investigation

The proposed $40 billion merger between Nvidia and the UK chip specialist Arm has been controversial from the outset. 

Back in September 2020, when the deal was first announced, opponents claimed that the deal would not only be bad for those companies currently reliant on Arm technology but could impact the UK’s technological sovereignty.

Indeed, Arm’s founder, Hermann Hauser, went so far as to suggest that “surrendering UK’s most powerful trade weapon to the US is making Britain a US vassal state”, even imploring the UK government to take a stake in the company and take it public instead. Since then, Hauser has started a ‘Save Arm’ campaign, calling on the government to intervene.

But while these appeals to national sovereignty have seemingly generated little response from the UK government, the latest report from the CMA just might.

The UK competition’s watchdog sent a report to Oliver Dowden on 20 July 2021, the executive summary of which has been published today, expressing major misgivings about the deal’s impact on competition. 

The primary concern is that Nvidia will have both the ability and the motivation to negatively impact their rivals by restricting their access to Arm’s intellectual property (IP), which many companies use to create semiconductors and related products. 

“Ultimately, the CMA is concerned this loss of competition could stifle innovation across a number of markets, including data centres, gaming, the ‘internet of things’, and self-driving cars. This could result in more expensive or lower quality products for businesses and consumers,” said a CMA statement. 

In the past, Nvidia has given promises that access to Arm IP will not be restricted for its rivals, but the CMA said that the “this type of remedy would not alleviate its concerns”.

Therefore, the CMA has recommended to the government that an in-depth investigation into the matter be initiated.

“We’re concerned that NVIDIA controlling Arm could create real problems for NVIDIA’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets. This could end up with consumers missing out on new products, or prices going up,” said Andrea Coscelli, chief executive of the CMA.

“The chip technology industry is worth billions and is vital to products that businesses and consumers rely on every day. This includes the critical data processing and datacentre technology that supports digital businesses across the economy, and the future development of artificial intelligence technologies that will be important to growth industries like robotics and self-driving cars.”

Responding to this report, Nvidia say they are ready to address the CMA’s concerns and are still “confident that this transaction will be beneficial to Arm, its licensees, competition, and the UK”.


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