Nvidia-Arm acquisition to be investigated by UK and EU

By Ellen Daniel

The European Union (EU) and the UK are preparing to investigate the acquisition of Cambridge-based chipmaker Arm by technology giant Nvidia.

The deal was originally announced in September 2020, with the GPU maker to acquire Arm from Japanese conglomerate SoftBank for $40bn.

Nvidia cited a desire to create the “world’s premier computing company for the age of AI” as a reason behind the acquisition, harnessing Arms computing ecosystem to do this.

However, in January the UK Competition and Markets Authority said that it would begin investigating the deal.

According to the Financial Times, competition officials from both the EU and the UK are now set to investigate the deal, with investigations at a preliminary stage and Brussels yet to formally file paperwork. The publication reported that a person with knowledge of the situation said that “scrutiny may lead all the way to a prohibition.”

There have been concerns that some of Nvidia’s rivals that currently use Arm’s technology could be negatively affected if the deal goes through. However, Nvidia chief executive Jensen Huang told the Financial Times that the company had “no intention to ‘throttle’ or ‘deny Arm’s supply to any customer”.

The US Federal Trade Commission may also launch its own investigation into the acquisition, with scrutiny also expected in China.

Russ Shaw, founder of Tech London Advocates & Global Tech Advocates, said:

“Arm is one of the UK’s most important tech companies and sits at the heart of the geopolitical landscape with respect to chip design. It is therefore not surprising that both UK and EU Competition authorities are wanting to investigate Nvidia’s $40 billion bid for Arm.

“It was remarkable that the company was so easily acquired by Softbank back in 2016, three weeks after the Brexit referendum. Nearly five years later, the UK and other nations have realised the enormous potential and importance of the semiconductor industry and why Arm is such an important asset.

“The UK is currently debating the newly proposed National Security and Investment Bill that will give the government greater powers to assess overseas acquisitions. It is clear that advanced technologies have a major role to play in economic growth, innovation, security and personal privacy – and so we should expect greater levels of scrutiny to ensure we get these significant transactions right.”

Read More: Nvidia buys Arm from SoftBank for $40bn in key AI bid.


Verdict deals analysis methodology

This analysis considers only announced and completed artificial intelligence deals from the GlobalData financial deals database and excludes all terminated and rumoured deals. Country and industry are defined according to the headquarters and dominant industry of the target firm. The term ‘acquisition’ refers to both completed deals and those in the bidding stage.

GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

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