The UK's competition watchdog found concerns with Nvidia's proposed acquisition of chip designer Arm, and called for an in-depth investigation into the deal.
GPU giant Nvidia first announced its intent to acquire Arm back in September 2020 for $40bn - a price that has now grown to $53bn thanks to Nvidia's stock valuation rocketing.
The Competition and Markets Authority said that it "found significant competition concerns associated with the merged business’ ability and incentive to harm the competitiveness of Nvidia's rivals," potentially by restricting access to Arm IP and "impairing interoperability between related products, so as to benefit Nvidia's downstream activities and increase its profits."
Nvidia has long promised to keep Arm's open licensing model, and said it would not use the company to harm others. It offered the CMA a set of behavioral remedies it said would address those concerns.
"The CMA found the offer to present considerable specification, circumvention, and monitoring and enforcement risks," and said that it "does not believe any form of behavioral remedy would address the competition concerns identified."
CMA chief executive Andrea Coscelli said in a statement: “We’re concerned that Nvidia controlling Arm could create real problems for Nvidia’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets. This could end up with consumers missing out on new products, or prices going up.”
The preliminary report has been sent to Britain’s Secretary of State for Digital Oliver Dowden, who will now decide whether to launch a deeper investigation.
“We look forward to the opportunity to address the CMA’s initial views and resolve any concerns the Government may have,” an Nvidia spokesperson said. “We remain confident that this transaction will be beneficial to Arm, its licensees, competition, and the UK.”
Earlier this week, Nvidia CEO Jensen Huang admitted that "discussions with regulators are taking longer than initially thought."
Competition regulators in China have not even begun a formal review of the deal. Over in the US, the FTC has opened an investigation into the acquisition after Google, Microsoft, and Qualcomm complained it would limit competition.
In Europe, Nvidia has yet to submit its paperwork to the European Commission.