Nvidia’s $ 40 billion Arm takeover faces an in-depth EU investigation

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The European Commission, the EU’s executive branch, has launched an “in-depth investigation” into Nvidia’s acquisition of the British chip designer Arm, which is currently owned by SoftBank. Nvidia announced more than a year ago that it wants to buy Arm for 40 billion dollars.

The investigation, announced by the Commission on Wednesday, is the latest failure for chip companies that have already said the deal is unlikely to be completed before the original March 2022 deadline.

The commission said it was concerned that the merger could limit access to Arm’s “neutral” chip design and could lead to higher prices, less choice, and reduced innovation in the semiconductor industry.

“Although Arm and Nvidia do not compete directly, Arm’s IP is an important input in products that compete with Nvidia’s products, such as data centers, the automotive industry, and the IoT,” Executive Vice President Margrethe Vestager said in a statement.

” Our analysis shows that Nvidia’s acquisition of Arm could lead to limited or degraded access to Arm’s IP, with distortion effects in many semiconductor markets,” she added.

This takeover should also be examined by regulators in the US, UK, and China.

” We work closely with the European Commission through the regulatory process,” an Nvidia spokesman told CNBC. ” We look forward to the opportunity to address their initial concerns and continue to show that this transaction will help strengthen Arm and foster competition and innovation, including for the EU.”

By: Amber V. – Zexron