Nvidia’s pending acquisition of processor firm Arm is reportedly facing opposition from some of the world’s biggest tech companies. Google, Microsoft, and Qualcomm are said to be among those that have asked U.S. antitrust regulators to intervene. There are concerns that Arm’s role as a supplier to the industry could be compromised were it to come under the ownership of Nvidia, which is a competitor to many.
It was announced that Nvidia had agreed to buy Arm from Softbank Group in September last year for $40 billion. Arm is not a typical processor company in that it manufactures them, instead licensing designs for others to build. Nonetheless, it is a supplier for many of the best known manufacturers of devices like smartphones, tablets, laptops, and PCs.
It is for this reason that competition regulators in the U.K., European Union, China and the U.S. are looking at the deal and why Bloomberg reports that tech companies are voicing their concerns. Citing people familiar with antitrust investigations who were speaking on condition of anonymity due to not being authorized to discuss the matter, Bloomberg says companies are worried that the deal will harm competition. At least one firm is reported to want the deal to be scrapped altogether.
Nvidia & Arm: Are Competitors Right To Be Concerned?
Nvidia says that the cost of the deal alone means that it would not be in its interest to limit Arm sales by influencing its neutrality. It also points to its ambitions in artificial intelligence as the reason for the acquisition and evidence that it is not interested in limiting access to Arm’s offerings elsewhere. Competitors will argue, though, that if this is the case then there Nvidia should not mind making concessions that would enshrine Arm’s neutrality into the deal.
Therein lies the crux of the matter. Nvidia’s ownership of Arm could well put it in a position in which it could have Arm raise its prices or otherwise limit access to competitors. This would give Nvidia undue control over a huge part of the industry. Competitors like Google and Microsoft aren’t to know whether or not Nvidia would really play fair, or if might change its mind further down the line. Indeed, even the knowledge that Nvidia could have Arm hike prices or limit access to products at 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 completely unrestricted. It is entirely reasonable for competitors to be concerned, regardless of how well-meaning Nvidia is at present. The question is what clauses or limitations might be put in place — or whether the deal may be blocked altogether.
