Following an extended period of regulatory uncertainly regarding NVIDIA’s planned acquisition of Arm, the European Union executive branch, the European Commission, has announced that they have opened up a formal probe into the deal. Citing concerns about competition and the importance of Arm’s IP, the Commission has kicked off a 90 day review process for the merger to determine if those concerns are warranted, and thus whether the merger should be modified or blocked entirely. Given the 90 day window, the Commission has until March 15th of 2022 to publish a decision.

At a high level, the EC’s concerns hinge around the fact that Arm is an IP supplier for both NVIDIA and its competitors. Which has led the EC to be concerned about whether NVIDIA would use its ownership of Arm to limit or otherwise degrade competitors’ access to Arm’s IP. This is seen as an especially concerning scenario given the breadth of device categories that Arm chips are in – everything from toasters to datacenters. As well, the EC will also be examining whether the merger could lead to NVIDIA prioritizing the R&D of IP that NVIDIA makes heavy use of (e.g. datacenter CPUs) to the detriment of other types of IP that are used by other customers.

It is worth noting that this is going to be a slightly different kind of review than usual for the EC. Since NVIDIA and Arm aren’t competitors – something even the EC notes – this isn’t a typical competitive merger. Instead, the investigation is going to be all about the downstream effects of a major supplier also becoming a competitor.

Overall, the need for a review is not terribly surprising. Given the scope of the $40 billion deal, the number of Arm customers (pretty much everyone), and the number of countries involved (pretty much everyone again), there was always a good chance that the deal could be investigated by one or more nations. Still, the EC’s investigation means that, even if approved, the deal will almost certainly not close by March as previously planned.

"Semiconductors are everywhere in products and devices that we use everyday as well as in infrastructure such as datacentres. Whilst Arm and NVIDIA do not directly compete, Arm's IP is an important input in products competing with those of NVIDIA, for example in datacentres, automotive and in Internet of Things. Our analysis shows that the acquisition of Arm by NVIDIA could lead to restricted or degraded access to Arm's IP, with distortive effects in many markets where semiconductors are used. Our investigation aims to ensure that companies active in Europe continue having effective access to the technology that is necessary to produce state-of-the-art semiconductor products at competitive prices."
Executive Vice-President Margrethe Vestager

Source: European Commission

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  • unrulycow - Wednesday, October 27, 2021 - link

    Nvidia doesn't need to buy ARM in order to make chips where they control the CPU and GPU. In fact, they already do this with their Tegra chips that combine ARM CPUs (either off the shelf or of their own design) with their own GPUs. ARM already licenses the architecture to tons of companies. The main benefit to owning the architecture is the ability to prevent licensing to competitors.
  • plopke - Wednesday, October 27, 2021 - link

    Apple has made one of the most power efficient cpus+gpus for a laptop.
    They din't need to buy ARM for that.

    I really wish this deals gets stopped instead of this becoming a other "how did they get so big and powerfull , amazon,facebook,google,etc,etc"
  • eldakka - Thursday, October 28, 2021 - link

    > Apple has made one of the most power efficient cpus+gpus for a laptop.
    > They din't need to buy ARM for that.

    They didn't buy ARM the company, but they did buy a perpetual ARM architecture license from ARM. Apple's CPUs are ARM architecture CPUs in the same way that AMD and VIA CPUs are (Intel) x86 architecture CPU's.

    If NVIDIA bought ARM, they could, for example, not issue any more of these ARM architecture licenses, so besides those who aleady have perpetual ones (Apple plus 14 others - I think Qualcomm is another - as of 2013 at least), they could refuse to issue any more. Or, they could cancel the subscription tier ( entirely, and force everyone to more granular licences that could earn NVIDIA more, cost those companies more, and reduce flexibility and competition in the ARM market.
  • .itMacuser - Sunday, October 31, 2021 - link

    Apple has a perpetual license because it was one of the 3 companies that founded ARM in 1990. So that perpetual access comes from the conditions Apple imposed on those who later bought its stake.

    I don't think other current ARM clients have an equal right, but if you can clarify "who and why" I would be grateful.

    Apple "has overcome" the need to own the technologies produced by ARM (such as, years ago, those on the GPU side of Imagination Thrcnologies) otherwise I think it would have strongly opposed this acquisition.
    Instead: "nothing"!
  • Wereweeb - Wednesday, October 27, 2021 - link

    No one and nothing is stopping Nvidia from designing ARM CPU's, except Nvidia itself.

    Buying ARM only gives them the ability to prevent others from doing so.
  • meacupla - Wednesday, October 27, 2021 - link

    I think the problem stems from how arm doesn't manufacture their own CPUs.
    Rather, arm design the chips, and then sells IP licenses to everyone else.

    When you add in how nvidia sells their own chips to the market, by buying arm, nvidiarm would be in direct competition with itself.
    And if you are cynical about how capitalism works, as you should be, there would be little to no reason for nvidia to off load the cost of developing their own chip, by increasing license fees. Unless, of course, EU decides to regulate that, by saying nvidiarm would be violating laws, if nvidiarm increased license fees, without increasing value of the license they offer.
  • ballsystemlord - Wednesday, October 27, 2021 - link

    Even if you wanted that sort of competition, you do realize the breadth of IP ARM does, right?
    CPUs, GPUs, uCs, and then there's where those items go into other products.
    You are aware that FPGAs have ARM IP inside of them, right? IIRC the same with AMD's CPUs -- for their ME.

    Simply trusting Nvidia with the fate of FPGAs and AMD's CPU division, is that wise?

    Moreover, if all you wanted was to see Nvidia do CPUs just like AMD, they already do. You are aware they have RISC-V CPUs inside of them GPUs, right? You do know that they could just sell the RISC-V CPUs outside of their GPUs, right?

    Considering your post doesn't take into account any of the above, I'd suggest you make a suggestion or shut up and do your research before posting.
  • yannigr2 - Thursday, October 28, 2021 - link

    Why? Who says that someone owns to Nvidia to have anything? And they already have both. They license ARM technology, so THEY DO HAVE BOTH ALREADY. AMD is licensing X86 in case you are forgetting it. They don't own X86. Intel does.
  • yetanotherhuman - Monday, November 8, 2021 - link

    ARM is bigger than NVIDIA. I disagree, I think it's critical that ARM stays a more independent entity.
  • coburn_c - Wednesday, October 27, 2021 - link

    The EU is not only late but confused about their jurisdiction. But hey, any chance to rob companies at pen point

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