UK’s markets regulator asks for views on Nvidia-Arm

The UK’s competition and markets regulator is seeking views on Nvidia’s takeover of Arm Holdings as it prepares to kick off formal oversight of potential competitive impacts of the deal.

The US-based chipmaker’s $40BN purchase of the UK-based chip designer, announced last September, has triggered a range of domestic concerns — over the impact on UK jobs, industrial strategy/economic sovereignty and even national security — although the Competition and Markets Authority (CMA)’s probe will focus solely on possible competition-related impacts.

It said today that the probe will likely to consider whether, post-acquisition, Arm would have an incentive to “withdraw, raise prices or reduce the quality of its IP licensing services to Nvidia’s rivals”, per a press release.

The CMA is inviting interested third parties to comment on the acquisition before January 27 — ahead of the launch of its formal probe. That phase 1 investigation will include additional opportunities for external comment, according to the regulator, which has not yet provided a date for when it will take a decision on the acquisition.

Further details can be found on its case page — here.

Commenting in a statement, Andrea Coscelli, the CMA’s chief executive, said: “The chip technology industry is worth billions and critical to many of the products that we use most in our everyday lives. We will work closely with other competition authorities around the world to carefully consider the impact of the deal and ensure that it doesn’t ultimately result in consumers facing more expensive or lower quality products.”

Among those sounding the alarm about the impact on the UK of an Nvidia-Arm takeover is the original founder of the company, Hermann Hauser.

In September he wrote to the prime minister saying he’s “extremely concerned” about the impact on UK jobs, Arm’s business model and the future of the country’s economic sovereignty.

A website Hauser set up to gather signatures of objection — called — states that more than 2,000 signatures had been collected as of October 12.

As well as the CMA, a number of other international regulators will be scrutinizing the deal, with Nvidia saying in September that it expected the clearance process to take 1.5 years.

It has sought to preempt UK concerns, saying it will double down on the country as a core part of its engineering efforts by expanding Arm’s offices in Cambridge — where it said it would establish “a new global center of excellence in AI research”.

On wider national security concerns that are being attached to the Nvidia-Arm deal from some quarters, the CMA noted that the UK government could choose to issue a public interest intervention notice “if appropriate”.

Arm was bought by Japan’s SoftBank in 2016 for around $31BN.

Its subsequent deal to offload the chip designer to Nvidia is a mixture of cash and stock — including an immediate $2BN cash payment to SoftBank. The majority of the transaction’s value is due to be paid in Nvidia stock at close of the deal, pending regulatory clearances.

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