Nvidia Won't Be Un-ARMed

Issue 67

Nvidia’s takeover of SoftBank’s ARM has come under fire by the British Government and as a result will launch a formal inquiry into the deal – regulators have cited both national security and anti-trust concerns.

The marriage two of the world’s largest chip designers would redraw the semiconductor industry as we know it and has attracted intense scrutiny from regulators around the world—and accusations from Nvidia competitors that it would hand the company a massive advantage. The deal could also possibly open the door to the United States Government to have massive regulatory leverage to prohibit the company from licensing it’s architecture to companies that the government deems a threat to its own national security.

The deal’s scrutiny is however unsurprising and was disclosed upon the deal’s announcement that the acquisition would likely come under regulatory scrutiny as well as heavy lobbying efforts by the company’s competitors as well as foreign governments that stand to lose within its 18-month closing timeline.

Arm based its business model on partnering with as many companies as possible in providing its chip designs. That model in part led to those designs being incorporated in more than 95% of the world’s smartphones.

British Digital Secretary Oliver Dowden asked the country’s antitrust agency to investigate the merger’s national-security implications and deliver a report by the end of July. The digital secretary can clear the deal with or without conditions or reject it entirely.

Nvidia CEO Jensen Huang has said he supports keeping Arm’s open business model, but competitors have been skeptical.

Source: Wall Street Journal