Nvidia gets a red signal from the UK regulator

Nvidia gets a red signal from the UK regulator
Nvidia gets a red signal from the UK regulator

Yesterday, Nvidia’s CEO warned that buying Arm might take “longer than initially thought” as yesterday, the UK’s Competition and Markets Authority (CMA) recommended a Phase 2 investigation. CMA seems to be worried that Nvidia is incentivized to stifle innovation.

CMA chief executive Andrea Coscelli said in a press release “We’re concerned that NVIDIA controlling Arm could create real problems for NVIDIA’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets. This could end up with consumers missing out on new products, or prices going up.”

As of now, the full report of CMA is not yet available but there is an executive summary available which explains some of the reasons for the concern. Notably, CMA found significant competition concerns due to foreclosure in the supply of CPUs, interconnect products, GPUs, and SoCs across several global markets, spanning the datacentre, internet-of-things, automotive, and gaming console applications.

According to CMA, the identified foreclosure strategies would reinforce each other and result in a substantial lessening of competition. One of the passages of the summary reads, “The CMA believes that the Merger may create incentives to change Arm’s business model to favor NVIDIA.”

CMA noted that Nvidia offered to “ensure an open licensing regime, based on equal access and interoperability” but the regulator feels that won’t be enough. Back in April, the British government announced that it is worried about national security implications and ordered the CMA to investigate. The investigation now has been referred back to the UK’s Secretary of State to decide “whether the merger should be referred for an in-depth Phase 2 investigation on both competition and national security grounds, or if it should be passed back to the CMA to investigate on competition grounds only.”

Mary Woods
A news media professional with strong experience in online journalism, content management, and social media.