According to Bloomberg News, major US technology companies are calling for the implementation of antitrust laws against Nvidia's acquisition of ARM. Since ARM is a British company, last month, the relevant British regulatory agencies have begun to investigate the transaction.
In addition to the previous strong opposition from Qualcomm, there are also Google and Microsoft. At least one of these three companies has stated that it needs to "cancel the transaction." Google’s involvement in this area is worth noting because it is currently facing an antitrust investigation by the US Department of Justice. These companies expressed concern about the possibility of terminating its open licensing history after Nvidia acquired ARM. Although Nvidia has promised to maintain ARM’s neutrality and will not change its business approach, considering that up to US$40 billion to acquire a company that lost US$400 million in 2020, it’s hard to believe that such an investment will not change the business model. The situation is reasonable.
Compared with ARM’s current parent company, SoftBank, Nvidia’s position in the chip field will cause other concerns in the industry. Most people believe that Nvidia will use this acquisition to restrict other competitors’ chip development plans.
Because the Nvidia transaction is global in nature, in addition to the British regulators, the United States, the European Union, and China will also investigate this, and there is a good chance that they will generally oppose it. It is not clear what the specific demands of Google, Microsoft, and other Nvidia competitors are, but it is inevitable to raise objections to various regulatory agencies. The U.S. government has just changed its term. The change in the leadership of the U.S. Federal Trade Commission (FTC) may make this transaction more difficult and trigger more scrutiny. In the past, similar transactions FTC generally adopted leniency policies, but the ruling party of the new government tends to oppose this type of large-scale vertical mergers.
The attitude of major ARM customers like Google, Microsoft, and Qualcomm will make this transaction possible to cancel. ARM has previously stated that the transaction will not be completed until 2022, but the current situation is likely to be delayed, and even delays may cause other problems. Such strong opposition, to a large extent, comes from the competition for the data center business, which was also a key area of NVIDIA's rapid revenue growth last year. Considering that many companies, including Microsoft, have chosen to use chips based on the ARM architecture as the core of their data centers, if the transaction between NVIDIA and ARM is successful, it may be a disaster for them.
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