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Nvidia had set early next year as the target date to close the $ 40 billion acquisition of chip designer Arm. Dreamstime
A UK regulator has serious concerns about itself
Nvidia
The $ 40 billion plan to buy British chip designer Arm would stifle competition and wants an in-depth investigation into the deal. However, any investigation should be ordered by the digital head of government.
Shares of Nvidia (ticker: NVDA) advanced 3.6% to $ 205.15, in afternoon trading. The S&P 500 and Dow Jones Industrial Average rose 0.8% and 0.7%, respectively.
The UK Markets and Competition Authority called for an investigation on the government’s website.
“We are concerned that Nvidia controlling Arm could create real problems for Nvidia’s rivals by limiting their access to key technologies and ultimately stifling innovation in several important and growing markets,” said Andrea Coscelli, chief executive of the authority . “This could end up with consumers losing new products or rising prices.”
The loss of competition, according to the authority, could hurt several markets, including video games, data centers, autonomous vehicles and the Internet of Things.
On Wednesday, in its second-quarter fiscal report, Nvidia warned investors that the acquisition would likely not close early next year, the initial target date. The company was unclear how long a delay could be.
“We look forward to the opportunity to address the CMA’s initial views and resolve any questions the Government may have,” an Nvidia spokesman said in an email. “We are confident that this transaction will be beneficial to Arm, its licensees, the competition and the UK.”
Nvidia offered to submit to an ongoing regulation, but the authority said the remedy would not alleviate its concerns. The regulator also noted that it had worked “closely” with other competition authorities around the world to “carefully consider the impact of the deal”.
The decision to open an in-depth investigation rests with UK digital secretary Oliver Dowden, who is also weighing in whether the deal will be stopped for national security reasons, Bloomberg News reported.
Arm’s business revolves around the development of technology that other companies license to use for chip design. Arm-based processors power most mobile phones in the world, and other companies, such as Apple, have begun using Arm processors in laptops and other devices. Semiconductors based on Arm technology tend to use less energy and generate less heat.
The acquisition of Arm by Nvidia has been a bet from the beginning, from the regulatory obstacles on both sides of the lake to the opposition of other technology companies, such as
Qualcomm
(QCOM), Alphabet (GOOGL) i
Microsoft
(MSFT).
Write to Max A. Cherney at [email protected]