US firm Nvidia purchased the company Arm (UK Chip Designer) for a total of 29 billion. However, the UK competition watchdog has some serious concerns about this planned deal.
The relevant authority said that this deal would restrain innovation in different areas such as self-driving cars and gaming. That's why the competition watchdog has announced that an in-depth investigation is required to look at the root of the issue.
But according to Nvidia, its deal will also benefit the UK chip designer, competition, and all the other parties involved. They also expressed their desire to address the initial views of the CMA and even to solve any concerns raised by the government.
ARM IP Used By Nvidia Rivals
The owner of Arm company made a deal to sell it to Nvidia last year, and we are here today where the deal is complete or about to be completed.
Arm company holds much intellectual property (IP) rights which are used by many rivals of Nvidia for the production of semiconductor chips. So when the competition watchdog raised concerns about this deal, it made sense given the unique position of ARM in the UK market.
If we look at Nvidia, it is one of the largest AI chip and graphic cards maker. With this deal of Arm, it will be able to have more leverage in its particular field and may even pose problems for its competition. That's why Nvidia has also offered multiple remedies to ensure that the deal is indeed approved by the regulators in the UK.
Now that the UK authorities have raised concerns, this deal will have to go through a phase 2 investigation. There is a high chance that Nvidia's bid to takeover the Arm company will be stopped by the authorities.
However if the NVIDIA manages to convince the competition watchdog, then that would be a different story!