Nvidia Offers EU Concessions Over $54bn ARM Deal

Nvidia has reportedly offered concessions to the European Commission (EC) over its attempt to acquire British chip designer ARM Holdings.

Reuters reported that a European Commission filing on Wednesday showed that the American GPU goliath had made the undisclosed concessions to the EC, in an effort to secure EU antitrust approval for its $54 billion acquisition of ARM.

If true, this will prompt questions as to what concessions Nvidia is offering the UK’s Competition and Markets Authority (CMA) watchdog, and indeed the British government – what with ARM being a UK firm and all.

Acquisition opposition

The EU competition watchdog reportedly did not provide details of the concessions in line with its policy, and has set an 27 October deadline for its decision.

It will seek feedback from rivals and customers before deciding whether to accept the concessions, demand more, or open a four-month long investigation.

In September 2020, after months of rumours, it was confirmed that Cambridge-based ARM was to be sold to Nvidia for a hefty $54 billion.

Nvidia’s acquisition of ARM is an unpopular move in some quarters, as ARM designs power 95 percent of the world’s smartphones, and there is concern at ARM’s sale to a single chip supplier could give Nvidia too much leverage in the market.

The acquisition has been opposed by one of ARM founders, Tudor Brown, as well as Hermann Hauser (involved in the development of the first ARM processor when it was part of Acorn).

It should be remembered however that Japan’s SoftBank had acquired ARM for $32bn in 2016, which also prompted political concern in the UK at the time, with politicians urging the government to step in to ensure that ARM remained headquartered in Cambridge.

But years later and some big players in the tech industry are concerned at ARM being acquired by Nvidia.

Indeed, the proposed acquisition is being opposed by firms such as Alphabet, Microsoft, and Qualcomm.

It should be noted that Google, Microsoft and Qualcomm all manufacturer their own inhouse processors, and depend upon ARM chip designs.

Reuters reported that ARM customers Broadcom, MediaTek and Marvell are however supporters of the deal.

And in early July ARM’s CEO, Simon Segars, strongly defended the deal, and said it was the best outcome for the British chip designer, and was a better solution than an IPO.

Regulatory probes

But the deal has to pass regulatory scrutiny around the world, with the UK leading the process.

In January 2021 the UK competition regulator, the Competition and Markets Authority (CMA), confirmed it would investigate Nvidia’s acquisition of ARM Holdings.

And because of the global importance of ARM, in addition to the British CMA probe, the US Federal Trade Commission (FTC), as well as the EU, have also launched their own probes into the matter.

Even China’s State Market Regulatory Administration is said to be investigating the proposed deal.

In April this year, the British government responded to the global pressure, and issued a ‘public interest intervention notice’ over ARM’s sale, citing national security implications.

And in August it was reported that after the CMA submitted its report to the government about the matter on 30 July 2021, there are signs that the deal may be blocked by the UK on national security grounds.

According to Bloomberg, which quoted ‘people familiar with the discussions’ as its sources, the CMA report allegedly ‘contains national security implications that are worrying.’