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Nvidia and Arm Says Purchase Could Save UK Chip Designer from Asset Strippers

Nvidia Arm
(Image credit: Nvidia)

Nvidia's proposed acquisition of British chip designer Arm has seen its fair share of will they / won't they / can they drama. The latest instalment of the saga centers around a statement provided by Nvidia to the UK's Competition and Markets Authority (CMA), in which Nvidia and Arm put forward some pretty convincing arguments in favor of the proposed $40bn deal.

Nvidia officially announced its intention to acquire Arm back in September 2020. With current owner Softbank's approval, Nvidia felt a brief period of elation but this was to be short-lived as various regional competition regulatory bodies weighed in to look closer at the deal. In the US, the FTC was spurred by interested parties such as Qualcomm, Google, and Microsoft to look very closely at Nvidia's proposed Arm acquisition. In the UK the CMA appeared to be initially taking a negative view on the buyout, but decided to make a closer and longer study into implications. The EU has started its own investigations into the implications of an Nvidia Arm tie-up too.

Circling back to the UK CMA's investigations, and the UK regulator has just published a PDF where Nvidia and Arm have presented their arguments [PDF] in favor of the acquisition. The lengthy document, called the "Phase 2 submission," looks at all the key markets addressed by Nvidia and Arm and reasons why the merged entity won't harm competition in those areas. It also bemoans the current state of affairs with Arm in limbo, while competitors are striving forward. Another significant point is that it reminds us that Nvidia is willing to commit to certain important legal obligations to get this acquisition fully approved.

Arm is at a crossroads

In the introduction to the newly published CMA document, it is highlighted by Nvidia that "Arm is at a crossroads." It is argued that Arm is going to go forward boldly with ample R&D and grow to become a stronger IT industry leader than ever, or it will be asset stripped for short term gains - bowing to shareholder pressure. The former situation would be witnessed thanks to the backing of Nvidia, and the latter if Arm were to face an IPO, argues Nvidia's statement. The Arm CEO, Simon Segars, agrees with Nvidia's case against an IPO. "We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast and innovate," noted Segars.

Simon Segars and Jensen Huang

(Image credit: Nvidia)

Inaction means Arm might be left behind by rivals

Throughout the document, as submitted to the CMA, Nvidia asserts that its business and Arm's have little if any overlap – so presents no reduced competition concerns. Additionally, the document repeatedly asserts that the merged entity will not change its competitive behavior, to the detriment of current customers. A common theme, as various markets are considered (Data Center, PC, Consoles, Smart Devices) in the document, is that rivals like AMD, Intel, Apple, Qualcomm, and others are forging ahead while Arm lives in an uncertain, underinvested land of uncertainty.

Nvidia's conclusion is that the UK CMA should approve the deal swiftly, to prevent further damage/drain on Arm, and to ensure better investment levels in the UK, and to maintain strong competition across computer architectures worldwide.

Mark Tyson
Mark Tyson

Mark Tyson is a Freelance News Writer at Tom's Hardware US. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.

  • -Fran-
    What a bunch of BS.

    ARM has been already competing with X86 and several other CPU ISAs out there and still came out on top for mobile; it's not like Intel didn't put money behind their Atom assault a few years back. This is just saying "we want to shower the current owners of ARM with loads of cash, but you aren't allowing us and they want the money badly". Well, no kidding! Like they actually care about ARM as a Company anymore. It's clear nVidia just wants ARM and it is now giving BS reasons to sway people from the cold hard truth: they'll use the assets to strongARM people around even more.

    Regards.
    Reply
  • VforV
    We should believe the "good intentions" of a company with a record breaking number of scummy practices over the years, another one done again just today actually, with their anti-consumer way of releasing the 3080 12GB... yeah, right, sure... :rolleyes:
    Reply
  • renz496
    -Fran- said:
    What a bunch of BS.

    ARM has been already competing with X86 and several other CPU ISAs out there and still came out on top for mobile; it's not like Intel didn't put money behind their Atom assault a few years back. This is just saying "we want to shower the current owners of ARM with loads of cash, but you aren't allowing us and they want the money badly". Well, no kidding! Like they actually care about ARM as a Company anymore. It's clear nVidia just wants ARM and it is now giving BS reasons to sway people from the cold hard truth: they'll use the assets to strongARM people around even more.

    Regards.

    what nvidia want is for ARM to attack the server segment more aggressively. yeah people don't like nvidia but nvidia logic on pumping R&D into ARM so they can "compete" better with x86 is a valid point. because that is what nvidia has been doing for years. we saw so many advancement on nvidia professional side because that segment are being "pumped" with the money they get from selling gaming GPU. all their professional effort will not where it is now if they rely solely on the revenue they got from selling their professional solution only. why did you think intel making another try at GPU market? that's because intel are very aware where nvidia get their money so they want to disrupt that. people are worried about increased priced or nvidia holding back some tech if they got ARM for themselves. but nvidia are far more sinister than just doing that kind of thing.

    also ARM still on top for mobile because they had others that help them to defend that position. and ironically that help come from one company that strong arm majority of the customer in the mobile segment to use their solution.
    Reply