Nvidia’s acquisition of ARM is under investigation by the US Federal Trade Commission (FTC). The regulating body has demanded more documents from Nvidia after its rivals made several comments to block its acquisition attempt by ARM. These rivals claim that the acquisition will put them at a disadvantage as it would allow Nvidia to directly affect their operations.
Nvidia’s acquisition of ARM in under investigation by the FTC
It should be recalled that Nvidia announced in September the acquisition of the British chip manufacturer, owned by the Japanese SoftBank, for $40 billion, also recalling that Nvidia indicated that it expected the agreement to be completed within 18 months. Now, according to reports, the FTC has sent a notice to Nvidia asking for more details on the agreement to find out if the acquisition requires a full antitrust investigation.
This is because ARM chip designs are used in billions of devices, including smartphones, servers, smart vehicles, etc. The company licenses the designs to hundreds of other companies, but some of these customers fear that if the ARM is bought by Nvidia, it will change the way they do business and could give the American technology giant an unfair advantage or lead to higher prices.
Nvidia has said it expects regulatory scrutiny and that the deal cannot be completed until 2022, 18 months after it was announced in September. Its CEO, Jensen Huang, has promised that ARM’s open business model will be maintained. The company has not yet sought approval from regulators in Brussels, the UK, or China, all of whom are likely to examine the deal closely. Nvidia is expected to apply for approval outside the Americas next year.
It is likely that US regulators will seek assurances from Nvidia that the purchase of ARM will not limit others’ access to its technology. If they believe a conflict of interest is unavoidable, the FTC may block the purchase, which could result in years of delay. The regulatory process also involves inviting interested parties, which are likely to include ARM customers and Nvidia’s rivals. On the other hand, Jensen Huang has said that Nvidia is willing to make legally binding commitments to protect ARM jobs in Britain. We’ll have to wait and see what happens.