EU Set To Launch Formal Probe Of Nvidia’s ARM Takeover

Matthew Broersma,
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European Commission set to launch full-scale probe of Nvidia’s proposed acquisition of ARM following formal notification in early September

The European Commission is likely to launch a formal competition probe of Nvidia’s controversial acquisition of chip designer ARM next week.

The probe is likely to begin after Nvidia formally notifies the EU of its plan to acquire ARM, which it intends to do in the week starting 6 September, according to several reports citing unnamed sources.

Nvidia first announced its deal to buy ARM from Japanese tech holding company Softbank in September of last year, and Nvidia has reportedly been holding informal talks with the EU for several months.

The Commission said the EU hasn’t yet been notified of the deal.

Full-scale investigation

The company’s formal request to the European Commission for approval of the deal will launch a 25-working day preliminary review, which is likely to be followed by a 90-working day full-scale probe.

Reuters reported in June that Nvidia might not be able to meet a March 2022 deadline for closing the deal due to EU regulators’ desire to wait until after the summer holidays to consider the matter.

Nvidia’s plan immediately drew criticism from the company’s competitors in the semiconductor industry, where ARM’s chip designs are widely licensed.

The UK’s competition authority has expressed concerns over the competition implications of the deal and the British government could also block the arrangement on national security grounds.

ARM’s chip designs are used in fields ranging from artificial intelligence to 5G equipment, and power nearly every smartphone, while Nvidia is the world’s biggest maker of graphics and AI chips.

Competition

Nvidia competitors such as Qualcomm, Samsung and Apple all use ARM designs, and Apple is currently switching its desktop and laptop computers from Intel processors to ARM-powered chips.

Competition authorities say the deal could give Nvidia the power to limit rivals’ access to ARM’s technology, which Nvidia has said it will not do.

Nvidia said in a presentation on its website that ARM customers such as Broadcom, MediaTek and Marvell support the takeover.

“This transaction will be beneficial to ARM, its licensees, competition and the industry,” Nvidia said in a statement.

“We are working through the regulatory process and we look forward to engaging with the European Commission to explain the transaction and address any concerns they may have.”