Nvidia's proposed acquisition of ARM, the chip designer in the U.K. has been questioned by the competition watchdog.
The government published its assessment today. Now, the government will need to decide whether or not to ask the Competition and Markets Authority to conduct an in-depth investigation into the acquisition.
The watchdog outlines concerns in the executive summary of CMAs report to the government that the deal would harm Nvidias competitiveness by restricting access IP for ARMs that is used by companies producing semiconductor chips, which are in direct competition with Nvidia.
CMA is concerned that losing competition could lead to innovation in a variety of markets, including data centres, gaming and self-driving vehicles. This will result in higher prices and lower quality products for consumers and businesses.
The CMA rejected Nvidia's behavioral solution and recommended that the investigation into the merger be moved to Phase 2.
Andrea Coscelli, CEO, stated in a statement that NVIDIA controlling Arm could cause real problems for NVIDIAs competitors by restricting their access to key technology and ultimately stifling innovative across a number important and growing markets. Consumers could be left out of new products or prices will rise.
Chip technology is worth billions of dollars and is essential to the products and services that consumers and businesses rely on every day. This includes critical data processing and datacentre tech that supports digital businesses throughout the economy. Future development of artificial intelligence technologies will also be important for growth industries such as robotics and self driving cars.
Nvidia was contacted for comment. Update: Nvidia has sent the following statement.
We are looking forward to the chance to discuss the initial views of the CMA and to resolve any concerns that the Government might have. We are confident that the transaction will benefit Arm, its licensees and competition as well as the UK.
The Department for Digital, Media, Culture and Sport stated that the U.K.'s digital secretary was now reviewing the information in the full report and will decide whether or not to ask the CMA for a Phase Two investigation.
It is not necessary to decide within a certain time frame, but the decision must be made as quickly as possible to reduce uncertainty.
There has been a lot of opposition to the merger, including from one of the co-founders at ARM.
