Nvidia announced in September plans to acquire Arm, the self-described “leading provider of processor IP,” for approximately $40 billion. The announcement quickly drew criticism from other companies, regulators and Arm Hermann Hauser, who was instrumental in the first Arm design at Acorn Computing. Now we can add one more complainant to the list: CNBC today reported that Qualcomm ”told the Federal Trade Commission, the European Commission, the U.K.’s Competition and Markets Authority and China’s State Administration for Market Regulation that it has concerns about Nvidia buying Arm.”
That might seem ironic, given Qualcomm’s own history of antitrust concerns, but that didn’t stop the company from making its complaints. It’s not hard to guess why. Arm’s IP can be found in practically every imaginable device category. Nvidia itself said in September that Arm licensees had shipped more than 180 billion devices based on the company’s technologies.
Nvidia promised that little would change about Arm if the acquisition were approved. It said it'd continue using the Arm brand, keep Arm headquartered in the UK and keep licensing Arm technology to other companies. Nvidia would also bolster Arm’s research and development efforts, it said, and complement the company’s IP with its own technologies. Such claims are often made when companies want regulators to approve their deals, however.
CNBC cited unnamed sources and reported that Qualcomm opposed Nvidia's acquisition "because it thinks there’s a very high risk that Nvidia could become a gatekeeper of Arm’s technology and prevent other chipmakers from using Arm’s intellectual property" and Nvidia won’t “be able to fully capitalize on the acquisition without crossing certain lines that people are worried about.”
The fear is that Nvidia will use Arm’s technologies to bolster its position in the artificial intelligence market, where Nvidia's graphics tech already gives it a solid foothold, and to better compete in the consumer technology market.
Another concern—which Hauser voiced in August–is that Nvidia could simply decide not to uphold Arm’s neutrality, which could indirectly harm the competition. (Arm’s current owner, SoftBank, has largely avoided these criticisms because it’s not a chip maker.)
Some regulators appear to share those concerns. The UK's Competition and Markets Authority started to investigate the Nvidia-Arm acquisition in January, for example, and CNBC reported that the FTC’s investigation has moved to a “second phase.” The FTC is reportedly seeking information from Nvidia, Arm and SoftBank, as well as other companies that might be affected by the deal. That’s a long list. Some of Arm’s most noteworthy licensees include Apple, Samsung, Amazon... and Qualcomm.
Much of this was to be expected. Nvidia had to have known that acquiring Arm would be controversial, and it originally anticipated that it would take at least 18 months for the deal to be approved by regulators. This is a complex deal that affects much of the tech industry and involves tens of billions of dollars; nobody thought it would go uncontested. Qualcomm’s appeal to regulators around the world merely demonstrates just how fiercely Arm licensees may contest the acquisition.