Nvidia's $40bn Arm Takeover Faces US Competition Investigation

Nvidia Hand Over Documents Related To The $40bn (£30bn) Takeover Ahead Of An Investigation That Is Expected To Take Months

Nvidia's $40bn Arm Takeover Faces US Competition Investigation
By James Titcomb

Nvidia’s blockbuster takeover of British technology company Arm is being investigated by US regulators on competition grounds as rivals lobby against the deal. The Federal Trade Commission (FTC) has demanded chipmaker Nvidia hand over documents related to the $40bn (£30bn) takeover ahead of an investigation that is expected to take months. Watchdog chiefs have sent a so-called second request to the company – a notice requiring it to dig out detailed material on which to base a competition investigation. The FTC is likely to seek reams of internal documents and interview executives as part of the process. Nvidia’s opponents have warned the regulator that the deal could reduce competition by challenging Arm’s existing neutral licensing system.

Arm’s chip designs are used in billions of gadgets including smartphones and connected cars. It licenses the designs to hundreds of other companies – but some of these customers fear that if Arm is bought by Nvidia, that will change the way it conducts business and could give the US tech behemoth an unfair advantage or lead to higher prices. Nvidia has said that it expects regulatory scrutiny and that the deal may not be completed until 2022, 18 months after it was announced in September. Its chief executive Jensen Huang has pledged that Arm’s open business model will continue.

The company has not yet sought approval from regulators in Brussels, the UK or China, all of which are likely to examine the tie-up closely. Nvidia is expected to file for clearance outside America next year. US regulators are likely to seek assurances from Nvidia that buying Arm will not limit others’ access to its technology. If it believes a conflict of interest is unavoidable then the FTC may sue to block the merger, which could trigger years of delays.

The regulatory process also involves inviting comments from interested parties, which are likely to include Arm’s customers and Nvidia’s rivals. In the UK, the deal has faced opposition from Arm grandees including co-founder Hermann Hauser. The company was bought by Japanese business Softbank for $32bn in 2016, in a takeover which took one of Britain’s most promising tech players off the London market and placed it in foreign ownership. Mr Huang has said that Nvidia is prepared to make legally binding commitments to protect jobs in Britain. Nvidia and the FTC did not comment.

This news was originally published at Telegraph