Nvidia's $40 Billion Arm Acquisition Is Under Scrutiny

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As expected, Nvidia’s $40 billion acquisition of Arm is nowhere near a done deal.

The EU and UK are ready to start investigating the merger, reports The Irish Times. Sources familiar with the matter told the publication that the deal will be thoroughly investigated, and could either be passed unconditionally or with concessions. The investigation comes in response to concerns that the deal will give Nvidia monopolistic power over current Arm licensees.

Sources say the investigation is just beginning, as paperwork has not been filed in Brussels yet. The UK Competition and Markets Authority is currently collecting statements from various companies about their views of the acquisition. In the past, Nvidia’s rivals have called for the deal to be blocked, so it seems likely those statements will contain the same or similar sentiments.


Arm co-founder Hermann Hauser wrote in a letter last year to the UK Foreign Affairs Committee that allowing Nvidia to acquire ARM would “give Nvidia a dominant position in all processor segments and create another U.S. technology monopoly.” If the acquisition were to be approved, it would only further exacerbate Britain’s worries about tech giants like Google, Facebook, Netflix and Amazon’s influence over the UK, said Hauser. Nvidia is one of 500 Arm licensees worldwide. Should Nvidia acquire Arm, it would become the licenser of those contracts. Nivida’s rivals have called for the deal to be blocked.

Nvidia CEO Jensen Huang had previously told the Financial Times that “Nvidia will maintain Arm’s open licensing model,” and that it has “no intention to ‘throttle’ or ‘deny’ Arm’s supply to any customer.”


An Nvidia spokesperson told Fortune, “The regulatory process is proceeding as we had planned,” and that the companyfully understand[s] that the relevant governments and regulators will review this transaction in detail, as they should, given the significance of the deal.” Nvidia remains confident that it will receive the necessary regulatory approvals to complete the acquisition.

Huang told the Financial Times that Nvidia would be happy to retain Arm’s open licensing model if that was a stipulation of the acquisition.


But it’s understandable if you don’t quite buy that, because tech giants have in the past agreed to conditions as part of a merger, only to disregard them later. Facebook, for instance, said it would not match WhatsApp and Facebook user accounts when it acquired the messaging platform in 2014, but it later went back on its promise.

The deal is also facing scrutiny in the U.S. and China, so it looks like Nvidia has a long road ahead.