Arm’s business model involves licensing chip designs to several hundred other companies including many that compete directly with Nvidia.
These competitors claim the takeover will put them at a disadvantage as it would allow Nvidia to directly affect their operations.
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Nvidia announced its plan to acquire the British chip designer from Japan’s SoftBank in a $40 billion deal, back in September. Since both companies are significant entities in the world of technology, the California-headquartered technology giant expected this kind of scrutiny by anti-competition regulators, not just in the US, but in other jurisdictions as well.
In fact, when the deal was announced, Nvidia had said they expected the deal to take 18 months to complete.
Now, according to reports, the US Federal Trade Commission (FTC) has sent a notice to Nvidia asking for further details about the deal before it takes a call whether the acquisition requires a full-blown anti-competition investigation.
Reports claim that the FTC is likely to “seek reams of internal documents and interview executives as part of the process,” which also involves inviting comments from various interested parties, including Arm’s customers and Nvidia’s rivals.
First of many
If the FTC sees merit in the anti-competition claims, it could sue Nvidia to block the acquisition, which “could trigger years of delays”.
Nvidia will face similar scrutiny once it files for approval in other jurisdictions outside the US, most significantly in the UK and China. Chinese chip makers such as Huawei have already been lobbying Beijing to block the deal fearing it will put them at the mercy of an American company.
In the UK, Arm’s co-founder Hermann Hauser has urged the Government to stop the deal as it would affect hundreds of jobs. This, despite reports of assurances from Nvidia’s CEO Jensen Huang, that his company is prepared to make legally binding commitments to protect jobs in Britain.
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Via: The Telegraph