Nvidia’s competitors have reportedly raised concerns to US antitrust officials about their proposed acquisition of processor design firm Arm.
Nvidia s The pending acquisition of processor company Arm is reportedly facing opposition from some of the world’s largest technology companies. Google, Microsoft and Qualcomm are said to be among those who have asked US antitrust regulators to intervene. There is concern that Arm’s role as an industry supplier could be compromised if it becomes owned by Nvidia, which is a competitor for many.
It was announced that Nvidia had agreed to buy Arm from Softbank Group in September last year for $ 40 billion. Arm is not your typical processor company in the sense that it manufactures, but licenses designs for others to build. However, it is a supplier to many of the well-known manufacturers of devices such as smartphones, tablets, laptops and PCs.
It is for this reason that competition regulators in the UK, the European Union, China and the US are looking into the deal and why Bloomberg reports that technology companies they are expressing their concerns. Citing people familiar with the antitrust investigations who spoke on condition of anonymity because they weren’t authorized to discuss the matter, Bloomberg says companies are concerned that the deal will hurt competition. At least one company is reported to want the deal to be canceled entirely.
Nvidia & Arm: Do competitors have a right to be concerned?
Nvidia says that the cost of the deal alone means that it would not be interested in limiting Arm’s sales by influencing its neutrality. It also points to its AI ambitions as the reason for the acquisition and evidence that it is not interested in limiting access to Arm’s offerings elsewhere. Competitors will argue, however, that if this is the case, then Nvidia shouldn’t mind making concessions that would enshrine Arm’s neutrality in the deal.
Therein lies the crux of the matter. Nvidia’s ownership of Arm could well put it in a position where it could cause Arm to raise its prices or limit access to competitors. This would give Nvidia undue control over a large chunk of the industry. Competitors like Google and Microsoft don’t know if Nvidia would really play fair or if it might change its mind later. In fact, even the knowledge that Nvidia could raise prices or limit access to products on a whim could be detrimental to competitors.
Given the potential for such widespread influence within the industry and the reported number of high-profile companies raising concerns, it seems unlikely that Nvidia’s acquisition of Arm will go through without restrictions. It’s completely reasonable for competitors to care, regardless of how well-intentioned Nvidia is today. The question is what clauses or limitations could be implemented, or if the deal can be blocked entirely.
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