CMA finds competition concerns with NVIDIA’s £31bn purchase of Arm

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The Competition and Markets Authority (CMA) has found that NVIDIA’s £31bn purchase of Arm raises serious competition concerns.

The proposed combination would bring together NVIDIA’s AI computing platform with Arm’s vast ecosystem to create the premier computing company for the age of artificial intelligence, accelerating innovation while expanding into large, high-growth markets. SoftBank will remain committed to Arm’s long-term success through its ownership stake in NVIDIA, expected to be under 10%, should the deal go through.

A summary of the CMA’s report, which was sent to the Secretary of State (SoS) for the Department for Digital, Culture, Media and Sport (DCMS) on 20 July ahead of the set deadline, has now been published. The CMA has determined that an in-depth investigation into the deal between NVIDIA and Arm is warranted on competition grounds.

Should the deal go ahead, the CMA is concerned that the merged business would have the ability and incentive to harm the competitiveness of NVIDIA’s rivals by restricting access to Arm’s intellectual property (IP). Arm’s IP is used by companies that produce semiconductor chips and related products, in competition with NVIDIA.

Ultimately, the CMA is concerned this loss of competition could stifle innovation across a number of markets, including data centres, gaming, the ‘internet of things’, and self-driving cars. This could result in more expensive or lower quality products for businesses and consumers.

NVIDIA offered a behavioural remedy – a measure which regulates the ongoing behaviour of a business – but the CMA found that this type of remedy would not alleviate its concerns. Therefore, the CMA found that the merger should be progressed to an in-depth Phase 2 investigation on competition grounds.

Andrea Coscelli, chief executive of the CMA, said: “We’re concerned that NVIDIA controlling Arm could create real problems for NVIDIA’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets. This could end up with consumers missing out on new products, or prices going up.

“The chip technology industry is worth billions and is vital to products that businesses and consumers rely on every day. This includes the critical data processing and datacentre technology that supports digital businesses across the economy, and the future development of artificial intelligence technologies that will be important to growth industries like robotics and self-driving cars.”

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