Nvidia’s $ 54 billion buyout of Arm struggling, competition concerns remain

Why is this important: Last week, Nvidia’s $ 54 billion acquisition of chipmaker Arm was accelerated by offering concessions to EU regulators. Unfortunately for the GPU titan, this hasn’t really worked in his favor – his desire to buy the UK company hit a stumbling block today as authorities worry about how the deal will affect competition in the industry.

Reuters sources have revealed that the proposed deal should be subject to an extensive EU antitrust investigation due to Nvidia’s concessions not addressing competition concerns. A preliminary examination by the European Commission is expected to end on October 27, followed by a new four-month investigation into the deal, the sources added.

“The regulatory process is confidential. The transaction will help transform Arm and drive competition and innovation, including in the UK,” said Nvidia.

The competition authority for the EU has opted out of receiving feedback from competitors and customers. Instead, he said the concessions were not enough to allay his concerns. Nvidia has said it will operate Arm as a neutral technology provider amid apprehension from customers including Qualcomm, Samsung Electronics and Apple.

Nvidia is currently the world’s largest manufacturer of graphics chips and is establishing itself as a market leader in the field of artificial intelligence chips. He would become a tech giant in the industry if he put Arm under his control. With this in mind, he offered “behavioral remedies” to the committee, which generally indicates a commitment to take action to preserve competition.

The Arm co-founder believes if the sale were to go through it would be a disaster due to concerns surrounding Arm’s neutrality. Earlier this year, a British regulator also intervened by launching an investigation.

Related Reading: Nvidia’s Purchase of Arm Completely Resets Semiconductor Landscape

Should the deal fail to materialize in the end, Arm could consider an IPO – the Cambridge-based company generates billions in revenue. However, Simon Segars, Managing Director of Arm, is “100% focused on closing this transaction”. If Segars’ ambition to see the sale materialize, it will only follow Dell’s $ 64 billion acquisition of EMC as one of the largest technology deals in history.

“The combination of Arm and Nvidia is a better result than an IPO,” said Segars. “The level of investment that will be required to lead artificial intelligence will be unprecedented.”

Meanwhile, as Nvidia awaits the outcome of the investigation, it has partnered with Microsoft to create the largest and most powerful language model to date, based on the formation of an AI model. on a supercomputer.

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