UK and EU to launch in-depth investigation into Nvidia's acquisition of Arm

European Union and UK market regulators are launching an in-depth investigation into Nvidia's $40 billion acquisition of Arm.

According to a report by the Financial Times on February 4, officials from both Brussels and the UK told the media that a detailed review of the transaction was necessary given Arm's extremely important position in chip design and manufacturing.

A person directly involved in the merger and acquisition transaction believes: "All details of the transaction will be reviewed one by one, and the final result may be to block the acquisition." However, other comments believe that the transaction can still be passed unconditionally or conditionally.

Nvidia announced this huge merger in September last year, which shocked the global semiconductor industry. The deal is currently facing scrutiny from regulators in the United States and China. Nvidia and Arm's current owner, Japan's SoftBank, have set an 18-month transaction deadline.

Investigations from the UK and the EU are still in their preliminary stages.

The UK Competition and Markets Authority has invited market stakeholders to comment on the deal and has pledged to launch a formal investigation in the coming months, although the paperwork has yet to be formally filed in Brussels.

Arm architecture is widely used in the chip industry. Major chip manufacturers in the world such as Apple, Samsung, Qualcomm and Broadcom all have deep cooperative relationships with Arm. These companies that rely on Arm technology are worried that if Nvidia successfully acquires Arm, it will greatly weaken Arm's neutral position.

“I can clearly state that Nvidia will maintain Arm’s original open patent licensing model,” Nvidia CEO Jensen Huang wrote in a letter to the Financial Times.

According to several people familiar with the matter, Nvidia's competitors are worried that Arm will become a powerful weapon for Nvidia to weaken competition and undermine Arm's neutrality. They have lobbied relevant antitrust officials in the European Union and the United Kingdom to prevent the deal from happening.

A person familiar with the matter said: "This merger is likely to not be approved in the end because there is no way to keep Arm neutral. Nvidia chose to initiate the acquisition of Arm precisely because of huge market interests. Otherwise, why would they pay this astonishing $40 billion?"

In addition, British Digital, Culture, Media and Sport Secretary Oliver Dowden is also facing external pressure and is studying whether the deal will have an impact on Britain's national security.