US FTC opens probe into Nvidia's acquisition of Arm

Microsoft, Google and Qualcomm are said to have complained to antitrust regulators about Nvidia's proposed takeover of Arm

The US Federal Trade Commission (FTC) has opened an in-depth probe into Nvidia's deal to acquire British chip designer Arm, says Bloomberg.

The US regulator is inviting views from big technology firms in the US on the proposed acquisition, say sources.

Qualcomm, Google and Microsoft have all complained to US antitrust regulators about the mammoth merger, stating that it could harm competition in the market. Sources claim that at least one of three companies wants the deal to be killed.

An Nvidia spokesperson told Bloomberg that the company's vision for Arm would eventually help all Arm licensees to grow their businesses and expand into new markets.

The spokesperson added that Nvidia is confident that both customers and regulators would see the 'benefits of our plan to continue Arm's open licensing model and ensure a transparent, collaborative relationship with Arm's licensees'.

Nvidia announced the deal in September last year, when it said that it had entered a definitive agreement with SoftBank Group Corp. (SBG) to acquire Arm, in a $40 billion transaction.

The company stated that as part of the deal, it would pay SBG $12 billion in cash and $21.5 billion in Nvidia common stock.

Nvidia began working more closely with Arm in 2019 to enable GPU-accelerated, ARM-based servers - a move that led to Nvidia's increased interest in the firm. The American company said at the time that its ARM-based reference design platform had also received support from Hewlett Packard Enterprise, Marvell, Fujitsu, Cray and Ampere.

Nvidia says that that the acquisition will help to create a computing firm for the age of AI, supporting new developments in robotics, autonomous driving, healthcare, life sciences and other fields.

Arm will operate as a separate unit following the takeover. Nvidia has also promised to provide the firm with more support for its R&D efforts.

Cambridge-based Arm licenses its technology to Nvidia, Qualcomm, Apple, and other firms for chips that power most of the world's smartphones. Arm's chip designs are widely used in laptops, IoT devices and data centres.

Because Nvidia is an Arm licensee, the proposed deal triggered concerns among other customers, who said that the deal could impact Arm's position as a neutral supplier.

The Labour Party called on the UK government to block the buyout. Two people involved with Arm from its early days have also voiced concerns about the proposed takeover, with one - Hermann Hauser - calling it a 'disaster' for Britain.

For its part, Nvidia has said that Arm will continue to 'operate its open-licensing model, while maintaining its global customer neutrality.'

Rene Haas, president of Arm's IP Products Group, said that Arm would take all appropriate measures to ensure that the Nvidia's ownership does not affect Arm's relationship with its existing customers.

However, it appears that assurances from Nvidia and Arm executives have failed to convince antitrust regulators and Arm's licensees. The UK's Competition and Markets Authority (CMA) said in January that it was preparing to launch a detailed investigation into Nvidia's takeover of Arm Holdings, and the USA's FTC has now joined in.

Arm said last week that its silicon partners shipped 6.7 billion Arm-based chips in the fourth quarter of 2020, which equates to a production rate of 842 chips per second. The firm also said that to-date, its partners have shipped more than 180 billion Arm-based chips overall.