According to CNBC reports, Microsoft, Google and Qualcomm have expressed concern to regulators about acquiring Nvidia’s Arm. and Bloomberg. The companies have approached regulators in the US, EU, UK and China with concerns that Nvidia may change how Arm licenses its chipmaking technology.
Nvidia has promised that it will not use its control over the company to change the way it links with other businesses. Write to the Financial TimesNvidia CEO Jensen Huang said he could state unequivocally that Nvidia would maintain Arm’s open licensing model. We do not intend to ‘stifle’ or ‘deny’ Arm’s offer to any customer.
However, Nvidia’s competitors claim that Arm will not be neutral and will not use its technology for Nvidia’s own profits, especially not after paying $ 40 billion for it. However, restrictions on licensing will harm the businesses that benefit from the ability to license Arm’s technology. Google and Microsoft are reportedly working on their own chips on the arm, and Qualcomm’s processors are based on the architecture.
In turn, Nvidia argued that the acquisition is about driving AI forward, an area that Nvidia has focused heavily on, from scaling up machine learning on its graphics cards to its work in self-driving cars. Arm’s low-power technology could help Nvidia distribute AI in more places, but the company will also have to figure out what to do with everything Arm does – mainly by powering almost every phone, as well as holding the key holds for computer companies moving away from Intel.
Regulators are also apparently looking closely at the deal to see if it will give Nvidia too much power in the disc-making industry: according to CNBC the Federal Trade Commission has asked Nvidia and Arm to provide it with more information, and it can talk to ‘other companies that have relevant information.’
Meanwhile, British and EU officials have promised to thoroughly investigate the deal. It is very likely that they will hear many objections, not only from Google, Microsoft and Qualcomm, but also from others in the disc making industry who are concerned about their open licensing agreement with Arm affected by the merger.
These companies have experience with regulators and competitive behavior. In the hundreds of millions and sometimes billions of dollars, Qualcomm had to pay various fines to authorities in China, South Korea and the EU for competing licensing policies. Of course, Microsoft had its big monopolistic case in the 90s, where it acted against the US government, and Google was recently the focus of the growing antitrust sentiment in the US and the EU.