After the British Competition & Market Authority (CMA) uncovered and voiced severe competition concerns, the planned 40-billion-dollar merger between American chipmaker Nvidia and Arm is at risk.
The CMA has expressed apprehension that the proposed relationship between Nvidia and the UK chip specialist Arm might be motivated by and be able to limit or even restrict access to the intellectual property (IP) of Arm. Currently, this technology is utilized to make semiconductor chips by firms that compete with Nvidia.
The potential absence of competition could interfere with innovation in various industries, including data centers and the Internet of Things (IoT). This might lead to products that are more costly or of reduced quality.
The CEO of the CMA Andrea Coscelli said: “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. 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 datacenters 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.”
Arm’s founder, Hermann Hauser, said that handing over the most powerful British commercial agent to the United States would make Britain a “vassal state”, even calling for the government of the United Kingdom to acquire a stake in the firm and make it a public company. Since then, Hauser has launched a campaign ‘Save Arm’ to call on the government to act.
However, Nvidia has given assurances that access to Arm IP will not be restricted from its rivals, but the CMA has stated that this type of remedy would not alleviate its concerns. Therefore, the CMA has recommended to the government that an in-depth investigation into this matter be initiated.