Nvidia-Arm plays “strong-Intel” card in UK deal probe

Nvidia-Arm plays “strong-Intel” card in UK deal probe

Business news |
By Peter Clarke

The paper – from GPU chip vendor Nvidia and IP licensor Arm – provides multiple arguments in favour of allowing the former to acquire the latter IP and has been published by the CMA an initial submission as part of the ‘Phase 2’ investigation of the deal (see UK orders more scrutiny of Nvidia-ARM deal).

The deal was originally proposed back in September 2020 but it has received a lot of criticism on the basis that Nvidia competes with companies that are licensees of ARM cores and architecture. The deal is facing scrutiny by competition authorities in the UK, Europe, the US and China.

There is the possibility that one or other of these may block the deal altogether Extended inquiries mean that the deal is likely to miss a target date of March 2022, which would be 18 months from the deal’s announcement.

Nonetheless Nvidia and Arm have a provided a robust defence of the deal in their submission.

The authors accuse opponents of the deal of romanticizing Arm’s past and either ignoring or under-estimating Arm’s competitors in x86 and RISC-V processor architectures. The submission argues that now that SoftBank’s Group investment is over, Arm faces the choice of finding another investor or pulling back from markets such as datacentre and PC where it has failed to grow and has only low market share.  In other words, Arm needs to merge with Nvidia because Intel is too strong in x86 for data center and PC and has started to offer x86 as part of foundry offering.

The submission also argues that allowing the deal would not create a significant lessening of competition in the many sub-markets where Arm operates. It argues that blocking the deal would result in a standalone, profit-maximizing business without any guarantees about licensing policy or investments.

However, no effort is made to address objections on the grounds of national security which also fall under the remit of the phase 2 investigation.

Related links and articles:

News articles:

US sues Nvidia over ARM deal

UK orders more scrutiny of Nvidia-ARM deal

Europe set to extend investigation of Nvidia-ARM deal

UK intervenes in Nvidia-ARM deal on national security grounds

Google, Microsoft, Qualcomm object to Nvidia-ARM deal

Jensen Huang’s defence of the Nvidia-ARM deal

ARM sale to Nvidia agreed at $40 billion

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