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UK gov’t investigates Nvidia’s Arm acquisition

Nvidia’s $40 billion takeover of Arm, which is one of the biggest tech acquisitions over the recent years, has drawn attention from UK’s Competition and Markets Authority (CMA) and will be probed for its possible impact and effect on UK’s market competition.

In a press release posted at the UK Government’s website, the chief executive of CMA, Andrea Coscelli mentions the importance of Nvidia’s acquisition of Arm and its impact on the everyday lives of UK’s citizens while reassuring that CMA will be working closely with authorities for the probe.

“The chip technology industry is worth billions and critical to many of the products that we use most in our everyday lives. We will work closely with other competition authorities around the world to carefully consider the impact of the deal and ensure that it doesn’t ultimately result in consumers facing more expensive or lower quality products.” Coscelli stated.

Moreover, according to CMA, after Nvidia’s acquisition of Arm, CMA will make it a point of consideration if Arm has “an incentive to withdraw, raise prices or reduce the quality of its IP licensing services to Nvidia’s rivals.”

The acquisition, which was formally announced on September 2020, aims to further Nvidia’s AI platform, which is an ecosystem Arm is largely familiar with. This is on top of Arm bearing the blueprint and license in the design and production of 90% of smartphones globally. (READ: Nvidia to buy Arm from SoftBank)

However, Arm’s co-founder Hermann Hauser has publicly expressed his concerns over Nvidia’s acquisition in a letter addressed to the House of Commons – Foreign Affairs Committee. According to Hauser, the supposed takeover of Nvidia will be an opportunity for the tech giant to become a “quasi monopoly supplier of microprocessors to the world.”

Arguing further, Hauser states that if the acquisition pushes through, Nvidia will be in a “dominant position” and will breed another US tech monopoly, which is something that is frowned upon in British soil. Hauser then sites tech giants Facebook, Google, Amazon and even Netflix.

In a report published by The Guardian, Hauser asserts that the the UK Government should “use its powers” to avert the impending Nvidia takeover, which for him is an “absolute disaster for Cambridge, UK and Europe,” or at the very least guarantee that Arm keeps its manpower in Manchester, Warwick, Cambridge and Belfast—retaining the jobs of thousands of Brits and at the same time prevent any unfair and unhealthy influence or preference toward Nvidia.

CMA, on the other hand, has invited third parties to comment regarding the acquisition. According to CMA, third parties are given January 6 to January 27 to comment. Dates surrounding merger inquiries and the deadline for phase 1 decisions have yet to be disclosed.

It is expected that the ongoing probe toward Nvidia’s acquisition will last for months as both CMA and other relevant government agencies will probe the $40 billion acquisition of Arm. And as reports would suggest, it will “help analyze the deal” to ensure that the acquisition will not lead to another market monopoly.

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