Competition watchdog to probe Nvidia’s $40bn Arm takeover
The UK competition watchdog has opened an investigation into Nvidia’s $40bn (£29bn) takeover of British chip designer Arm.
The Competition and Markets Authority (CMA) today said it will look into whether the deal could lead to Arm withdraw, raising prices or reducing the quality of its services to Nvidia’s competitors.
“The chip technology industry is worth billions and critical to many of the products that we use most in our everyday lives,” said CMA chief executive Andrea Coscelli.
“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.”
Cambridge-based Arm, which designs chips for mobile phones, licenses its technology to firms including Nvidia and Intel.
The proposed deal has sparked concerns that Nvidia could block its rivals’ access to Arm’s intellectual property.
Nvidia has said it will retain Arm’s neutral licensing model and has pledged to keep the company headquartered in the UK.
But a string of critics have hit out at the deal, with Arm co-founder Hermann Hauser describing it as a “disaster” for the UK.
Aside from competition concerns, opponents of the deal have raised concerns about the sale of British tech assets to foreign buyers.
Former business secretary Lord Peter Mandelson in October accused ministers of “waving the Union Jack while selling off the crown jewels”.
“We have precious few technology champions in Britain,” he told City A.M. “Yet with Arm it seems the government is prepared to sit back and watch as Nvidia potentially rides roughshod over Arm’s business model and its ability to supply the marketplace as a whole.”
The CMA said its remit was to assess potential competition concerns and that it could not consider “other potential effects that a merger might have, for example on employment or industrial strategy”.
It added that any national security concerns would be a matter for government, which has the power to issue a public intervention notice.