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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  • Spunjji - Thursday, October 28, 2021 - link

    "Every ARM chip except Apple is all the same as the base ARM designs, honestly."
    Absolute nonsense. Nvidia already developed their own bespoke ARM-compatible architecture.

    "You can't ask NVidia to invest 10s of billions of dollars in to ARM design if they can't then sell those designs to others to make back their money, without risk that they just rip it off and don't pay nVidia for the work."
    What are you even on about? Again, they already did this, and nobody ripped them off.

    "I'm saying we need a lot more R&D into basic ARM designs, they are 3 years behind Apple and Intel and AMD will beat ARM at this rate."
    What about Nvidia buying ARM makes you think they will be more likely to invest money into those basic designs and then actually licence them out to customers under fair terms?
  • ballsystemlord - Thursday, October 28, 2021 - link

    In addition to others replies, even if you really think that Nvidia couldn't possibly produce ARM CPUs today, they can do it with RISC-V. They chose not to.
    Moreover, they're trying to purchase the whole ARM company -- not just their CPU division.
  • Lord of the Bored - Thursday, October 28, 2021 - link

    "You can't ask NVidia to invest 10s of billions of dollars in to ARM design if they can't then sell those designs to others to make back their money, without risk that they just rip it off and don't pay nVidia for the work. If they don't own ARM they will be accidentally giving away that R&D and it won't benefit themselves enough to put that investment in action."

    So what you're saying is that since no one wanted to buy Tegra, nVidia must be allowed to buy Arm so they can FORCE people to buy Tegra?
  • yannigr2 - Thursday, October 28, 2021 - link

    Nvidia could finally pay their shenanigans with Ageia and PhysX. How they killed PPU boards, how they where limiting PhysX on their own graphics cards if an AMD card was used as a primary. Someone only needs to look back to how they treated even their own customers and know that Nvidia is the worst owner ARM could have for everyone else.
  • Farfolomew - Thursday, October 28, 2021 - link

    Maybe NVidia should have bought Nuvia instead, then they could be creating the next M1 competitor.
  • SSTANIC - Thursday, October 28, 2021 - link

    I particularly liked the last two words in the article "Margrethe Vestager".. :)
  • Silver5urfer - Thursday, October 28, 2021 - link

    I hope this gets cancelled out and ARM stays where it does, below. With Nvidia gulping them they would become massive due to Nvidia's GPU leadership in HPC. ARM garbage deserves nothing, esp for a DIY PC enthusiast or even general compute. ARM HW and SW is a joke and rely too much on the vendor BS. Esp on Android Blobs and far less obey GNU GPL V2 etc. Apple is full custom jailed BS.
  • smilingcrow - Thursday, October 28, 2021 - link

    If Jensen is wearing matching leather trousers, the EU official will require a lot of lube to go with the probe.
  • TristanSDX - Thursday, October 28, 2021 - link

    NV also produce toasters, so no worry here, deal approved

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