Nvidia's $54 billion takeover of Arm in trouble, competition concerns remain

zakislam

Posts: 52   +1
Why it matters: Last week, Nvidia's $54 billion acquisition of chip manufacturer Arm was expedited by offering concessions to EU regulators. Unfortunately for the GPU titan, that hasn't exactly worked in their favor—its desire to buy the British company hit a stumbling block today as authorities are concerned about how the deal will affect competition in the industry.

Reuters sources revealed that the proposed deal is expected to face an extended EU antitrust investigation due to Nvidia's concessions failing to address competition concerns. A preliminary review conducted by the European Commission should conclude on October 27, followed by a further four-month investigation into the deal, the sources added.

"The regulatory process is confidential. The transaction will help to transform Arm and boost competition and innovation, including in the UK," Nvidia stated.

The competition enforcer for the EU opted not to receive feedback from rivals and customers. Instead, it said the concessions were not sufficient enough to alleviate its concerns. Nvidia declared that it would operate Arm as a neutral technology supplier amid apprehension among customers, including Qualcomm, Samsung Electronics, and Apple.

Nvidia is currently the world's biggest manufacturer of graphics chips and is establishing itself as a market leader in the artificial intelligence chips field. It would become a tech behemoth in the industry were it to bring Arm under its control. With this in mind, it offered "behavioral remedies" to the commission, which usually indicates a commitment to take measures at preserving competition.

Arm's co-founder believes if the sale were to be completed, it would be a disaster due to worries surrounding Arm's neutrality. Earlier this year, a UK regulator also weighed in by launching an investigation.

Related reading: Nvidia purchase of Arm completely resets semiconductor landscape

Should the deal ultimately fail to materialize, Arm may consider an IPO—the Cambridge-based firm generates billions in revenue. However, Simon Segars, Arm's chief executive, is "100% focused on closing this transaction." If Segars' ambition to see the sale come to fruition becomes a reality, it will only trail Dell's acquisition of EMC ($64 billion) among the largest tech deals in history.

"The combination of Arm and Nvidia is a better outcome than an IPO," Segars stressed. "The level of investment that will be needed to lead in artificial intelligence will be unprecedented."

Meanwhile, while Nvidia awaits the outcome of the investigation, it has teamed up with Microsoft to create the largest and most powerful language model to date, based on training an AI model on a supercomputer.

Permalink to story.

 

Burty117

Posts: 4,271   +2,358
The thing is, Nvidia have a history of buying companies out and then ruining the tech / charging more or outright locking out anyone else from using it.

I hope (for once) our government / EU actually use their powers for good and stop this deal.

Also:
However, Simon Segars, Arm's chief executive, is "100% focused on closing this transaction."

The CEO sounds like a terrible person.

"The level of investment that will be needed to lead in artificial intelligence will be unprecedented."

Ok and you're head of one of the most successful CPU architecture developers of all time, why does Nvidia need to buy you in order to carry out AI development? Why can't you work with Nvidia (like you already do now) to continue development into AI?

This guy just sounds like someone who is already a multi-multi-multi-millionaire who is desperate to join the billionaire club ARM be damned.
 

Austinturner

Posts: 316   +404
The thing is, Nvidia have a history of buying companies out and then ruining the tech / charging more or outright locking out anyone else from using it.

I hope (for once) our government / EU actually use their powers for good and stop this deal.

Also:
However, Simon Segars, Arm's chief executive, is "100% focused on closing this transaction."

The CEO sounds like a terrible person.

"The level of investment that will be needed to lead in artificial intelligence will be unprecedented."

Ok and you're head of one of the most successful CPU architecture developers of all time, why does Nvidia need to buy you in order to carry out AI development? Why can't you work with Nvidia (like you already do now) to continue development into AI?

This guy just sounds like someone who is already a multi-multi-multi-millionaire who is desperate to join the billionaire club ARM be damned.
This, a public listing is THE way to access huge amounts of capital for those kinds of investments and contracts and joint ventures can achieve partnerships. If it is worth more to nvidia, it is probably because they get monopoly access to arm and can prevent arm from making agreements with nvidia’s competitors.
 

dangh

Posts: 329   +465
Nvidia have a history of putting everything behind a paywall or locking the tech from competition. I'm sure I don't want to see it happen with arm.
 

Kosmoz

Posts: 463   +814
I don't like nvidia, so I don't want them to buy Arm. I acknowledge their GPUs are good, but they are one of, if not the most scummiest company in recent times (or since forever).

So if this end up with them not buying, then good.
 

Ludak021

Posts: 578   +447
Sometimes I have to wonder what people think ARM is and what do they make, because it ain't related to their mobile phones...
 

hahahanoobs

Posts: 3,869   +1,920
I'm going the other way.
The acquisition could boost innovation with Nvidia controlling the software and hardware for what they want to do. Stalling or waiting could deprive many of us on this planet of various levels of tech going forward. The acquisition could boost AI and HPC to levels others have only dreamed of. Nvidia kinda has the best shot at doing the most now with such a purchase. We can't be going without simply because the competition doesn't have the same capabilities yet.

The monopoly fear is a trash defense and so severely overused it's lost meaning. This planet is full of monopolies, and an AMD/INTEL/NVIDIA monopoly isn't even in my top 5 of ones I'm worried about. COVID has done more damage than a chip monopoly could do. The rest is just speculation.

Think about it. Walmart is a monopoly and they have low prices. Same with Amazon. Not all monopolies are bad, or avoidable is my point. We will adapt as humans do if or when they arise.
 

Aceseven

Posts: 125   +180
Were here again eh, letting one company rule over something thats used/needed by everyone?

has no one learned anything from the chip debacle, stop tossing everything into one basket, this never ends well.
 

gamerk2

Posts: 628   +546
The thing is, Nvidia have a history of buying companies out and then ruining the tech / charging more or outright locking out anyone else from using it.

I hope (for once) our government / EU actually use their powers for good and stop this deal.

Also:
However, Simon Segars, Arm's chief executive, is "100% focused on closing this transaction."

The CEO sounds like a terrible person.

"The level of investment that will be needed to lead in artificial intelligence will be unprecedented."

Ok and you're head of one of the most successful CPU architecture developers of all time, why does Nvidia need to buy you in order to carry out AI development? Why can't you work with Nvidia (like you already do now) to continue development into AI?

This guy just sounds like someone who is already a multi-multi-multi-millionaire who is desperate to join the billionaire club ARM be damned.

He's doing his job. A CEOs only job is to increase the value of the company for it's shareholders; that's IT. That's the economic system we decided on, for better or worse.

He's not even wrong; ARM doesn't have the revenue to keep up in a technology race. It has to be acquired by someone to fund them going forward if they want to be more than a niche CPU designer.
 

Burty117

Posts: 4,271   +2,358
He's doing his job. A CEOs only job is to increase the value of the company for it's shareholders; that's IT. That's the economic system we decided on, for better or worse.

He's not even wrong; ARM doesn't have the revenue to keep up in a technology race. It has to be acquired by someone to fund them going forward if they want to be more than a niche CPU designer.
I never said he wasn't doing his job, I was saying he's being a **** about it.

Also, "Niche" CPU designer? You for real?
 

gamerk2

Posts: 628   +546
I never said he wasn't doing his job, I was saying he's being a **** about it.

Also, "Niche" CPU designer? You for real?
What I meant by that is "limited to competing only in certain market sectors". To scale up like ARM wants, they need a hell of a lot more cash then they have access to.