FTC Has ‘Concerns’ About Nvidia Deal to Buy Arm

Joseph B. Hash

Nvidia has indicated that the U.S. Federal Trade Commission is moving ahead with an antitrust investigation of its $40 billion offer to acquire U.K. chip designer Arm.

In a commentary on Nvidia’s third-quarter results, CFO Colette Kress disclosed Wednesday that FTC regulators had “expressed concerns regarding the transaction, and we are engaged in discussions with the FTC regarding remedies to address those concerns.”

The disclosure came a day after the U.K. government authorized its Competition and Markets Authority (CMA) to conduct an in-depth probe of the merger, citing concerns over its potential effect on competition in the semiconductor business and risks to national security.

The merger, which is also facing scrutiny in the European Union, “may be expected to operate against the public interest,” Digital and Culture Secretary Nadine Dorries said.

According to CNBC, Arm is “widely seen as the jewel in the crown of the British tech sector.” Nvidia announced in September 2020 that it would buy the company from Japan’s Softbank, saying the deal would “create the premier computing company for the age of artificial intelligence, accelerating innovation while expanding into large, high-growth markets.”

However, as the Financial Times reports, the deal “has attracted opposition from some big American tech companies that worry Nvidia will limit their access to Arm’s chip designs, giving it an unfair advantage in big chip markets such as data centers and cars.”

Alphabet, Qualcomm, and Microsoft have reportedly complained to U.S. antitrust regulators about the transaction.

Nvidia has made an offer to U.K. and EU regulators to guarantee not to cut Arm’s customers off or to change the list of Arm products to which they have access. But in an initial report, the CMA said it did not believe any remedy would address its concerns over competition.

Nvidia claims the deal will lead to more innovation and that Arm will benefit from increased investment.

“Although regulators and some Arm licensees have expressed concerns or objected to the transaction, we continue to believe in the merits and benefits of the acquisition to Arm, its licensees, and the industry,” Kress said.

antitrust, Arm, Competition and Markets Authority, Federal Trade Commission, FT, Nvidia, semiconductors

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