China might be the last country to weigh in on Nvidia’s proposed acquisition of Arm. The Financial Times today reported that Nvidia “submitted an application to Chinese competition regulators” to review the proposal ”in recent weeks” even though the $40 billion acquisition was officially revealed to the public in September 2020.
It’s not clear why Nvidia started the approval process in China almost nine months after it announced its plan to acquire Arm from SoftBank—especially since Nvidia CEO Jensen Huang said at GTC 2021 in April that he expected the deal to close in 18 months. The Financial Times said it could take that long to receive China’s approval.
Assuming “in recent weeks” means some time after GTC 2021, the purportedly late submission to Chinese regulators could delay the acquisition’s closing to 2023, assuming the deal is approved. That‘s later than Huang predicted just a few months ago, and the controversial nature of the deal could stretch the regulatory approval process. Huang has remarked that he expects the merger to close within the expected timeframe.
Not that China is the acquisition’s only obstacle. The UK Secretary of State for Digital, Culture, Media and Sport asked the Competition and Markets Authority to investigate the deal in April, and companies like Qualcomm, Microsoft, and Google have reportedly complained about the acquisition to US regulators as well.
In this, it seems Chinese tech companies are aligned with their Western counterparts. The Financial Times said that Huawei’s chip company, HiSilicon, as well as Semiconductor Manufacturing International Corporation, have opposed the deal. (Probably at least partly because of US government restrictions on their businesses.)
It’s entirely possible that regulators around the world are going to approve the Nvidia-Arm acquisition faster than most people expect. Nvidia has repeatedly said that it would continue to remain neutral when it comes to licensing Arm technologies to its competitors; maybe that will be enough for the deal to pass.
But it seems unlikely. Arm pioneer Hermann Hauser has already said that technologies like NVLink used in the upcoming Grace CPU show that Nvidia won’t compete fairly with Arm licensees, and Citigroup analysts said in April that they’re giving the acquisition a 10% chance of being approved because of those concerns.