UK rightly decides to take a closer look at Nvidia’s acquisition of Arm

The UK Competition and Markets Authority has concluded there are sufficient competition concerns around the acquisition of chip designer Arm to justify an in-depth investigation.

Nvidia makes chips for PCs, servers and embedded applications, many of which are based on Arm designs, which it licenses. The thing is, so do loads of its competitors, who would have to enter into licensing contracts with Nvidia if the acquisition of Arm was allowed to complete.

“We’re concerned that Nvidia controlling Arm could create real problems for Nvidia’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets,” said Andrea Coscelli, chief executive of the CMA. “This could end up with consumers missing out on new products, or prices going up.

“The chip technology industry is worth billions and is vital to products that businesses and consumers rely on every day. This includes the critical data processing and datacentre technology that supports digital businesses across the economy, and the future development of artificial intelligence technologies that will be important to growth industries like robotics and self-driving cars.”

Nvidia presumably had advance warning of this decision, warning during its recent earnings call that the whole thing was going to take longer than expected. As Coscelli said, Arm designs are relied upon by most of the semiconductor ecosystem, which makes its ownership an especially delicate matter. The Softbank acquisition was presumably approved, at least in part, because Softbank doesn’t make chips. It’s hard to see how Nividia could offer any kind of remedy that would adequately compensate for the considerable competition concerns this move creates.