Nvidia faces European Commission in-depth investigation on Arm purchase

The European Commission announced on Wednesday it has opened an in-depth investigation into the $40 billion purchase of Arm by Nvidia.

The commission said it was concerned that Nvidia would restrict access to Arm IP, and would lead to higher prices and lessened competition, following its initial investigation. It added that Nvidia has filed commitments that met some of its preliminary concerns, but these were not enough to “clearly dismiss its serious doubts”.

Specifically, the commission said it was concerned about the impact of the transaction on data centre CPUs, smart interconnects, chips in car infotainment and driver-assistance systems, high-performance IoT devices, gaming consoles, and PCs.

The deeper investigation would look at whether Arm licensees would be less likely to continue sharing commercially sensitive information with Arm if they competed with Nvidia, and whether Nvidia would refocus Arm research into profitable areas of Nvidia’s portfolio.

“Our analysis shows that the acquisition of Arm by Nvidia could lead to restricted or degraded access to Arm’s IP, with distortive effects in many markets where semiconductors are used,” European Commission executive vice president Margrethe Vestager said.

“Our investigation aims to ensure that companies active in Europe continue having effective access to the technology that is necessary to produce state-of-the-art semiconductor products at competitive prices.”

Although the deal was first announced in September 2020, the commission said it was first notified of the deal on September 8 this year.

The commission has until 15 March 2022 to make a decision.

The move from the Europe follows the competition authority of recent European leaver, the United Kingdom, raising its own concerns over the deal.

When the deal was first announced, Nvidia founder and CEO Jensen Huang told journalists that the companies were “completely complementary”.

“Our intention is to combine the engineering and the tech — the R&D capacity of both companies so that we can accelerate the development of technology for Arm’s vast ecosystem, and one of the areas … that we very interested in, is to accelerate the development of server CPUs,” he said.

Arm’s president of IP Products Group Rene Haas has also previously assured there would be a firewall between the two companies and added that they would not give any early access to Nvidia. But Haas later admitted that Arm would have to share certain information with Nvidia, like if large customers move to RISC-V, an open-source competitor to Arm.

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