NVIDIA's ARM acquisition hits another roadblock thanks to EU regulator probe

NVIDIA GeForce RTX 2080 and RTX 2080 Ti
NVIDIA GeForce RTX 2080 and RTX 2080 Ti (Image credit: NVIDIA)

What you need to know

  • NVIDIA's ARM acquisition has been in the works since late 2020.
  • Numerous regulatory hurdles have cropped up since then, stalling the acquisition's progress.
  • Now that the obstacle of European summer vacation has been overcome, an EU regulatory probe is the next complication NVIDIA will have to manage.

NVIDIA's ARM acquisition cannot seem to catch a break, based on the long series of setbacks and delays that have beleaguered it since it came into being in late 2020. Regulators from many countries and regions, ranging from China and the U.S. to the UK and EU, have all had a hand in slowing proceedings to a crawl, thereby forcing NVIDIA to reconsider its timeline for the deal. And now, after the tech company overcame the hurdle of waiting out European summer vacation, it has to deal with the EU's next curveball: Antitrust regulators entering full-on probe mode.

As reported by Reuters, the European Commission has now declared it's doing a full investigation to determine whether NVIDIA acquiring ARM would unfairly harm the operations of other industries and rival companies such as Qualcomm, Apple, and Samsung. For its part, NVIDIA says no such thing would happen and that ARM would remain agnostic even under the green team's ownership, not creating unfair biases in the marketplace. But, as evidenced by the probe, regulators are not taking NVIDIA at its word.

It's reported that the European Commission will make its decision by March 15, 2022. Britain is also giving the acquisition a hard lookover, with its competition agency probing the attempted purchase as well.

Between these probes and the pending wildcard of what China will decide on the matter, the light at the end of the acquisition tunnel may still be far off. And the deal could crumble altogether if further delays and complications appear.

Robert Carnevale

Robert Carnevale is the News Editor for Windows Central. He's a big fan of Kinect (it lives on in his heart), Sonic the Hedgehog, and the legendary intersection of those two titans, Sonic Free Riders. He is the author of Cold War 2395. Have a useful tip? Send it to robert.carnevale@futurenet.com.

  • You wonder if they're would be this much scrutiny if it was someone like Apple or Samsung doing the buyout.
  • NVIDIA is not a well-loved company in industry circles.
  • Personally, I don't really want ARM to be owned by nVidia, but I prefer that to governments flexing their power, over-regulation, and generally interfering with these kinds of private transactions. I could support their blocking it on national security grounds (don't think there is much concern over that in this specific case), but not subjective factors subject to lobbying influence like a loss of competition. It's not like there are no other chip design companies: Apple, Intel, AMD, Samsung, to list just a few. I think the burden of proof that there will be a problem should on the interfering government and the bar should be very, very high. Otherwise, it's just a chilling effect on innovation and trade.
  • Think about what you are advocating for lol... Nvidia is the epitome of monopolistic practises. Just look at what they tried to pull with the Geforce Partner Programme just to squeeze out the competition. That's just one example. But it's the one that's mostly documented. https://wccftech.com/nvidia-gpp-ignites-uproar-calls-for-boycott-among-p... https://wccftech.com/nvidia-gpp-opposition-grows-hp-dell-say-no-intel-mu... https://hexus.net/business/news/components/116066-report-raises-concerns... https://www.techpowerup.com/242216/nvidias-new-gpp-program-reportedly-en... Another is branding Freesync capable monitors as G-sync compatible with less prominent branding about Freesync. I've seen this myself as well - in Currys with rows and rows of G-sync compatible monitors, zero mention of Freesync at all. Some history:
    https://www.reddit.com/r/Amd/comments/dda0yy/freesync_monitors_are_activ... So yeah, in cases like Nvidia acquiring the Intellectual Property Holder whose designs and patents are effectively in every single device use in the world. That has to be scrutinised, no stone left unturned, this is not about government flexing. This is about holding monopolistic practises in check.
  • TechFreak1, I generally agree with most of that (but not all of those are really problems, e.g., I don't have a problem with nVidia trying to profit from its G-Sync innovation, which in turn inspired the FreeSync alternative, from which many more people benefited) -- as I said in my post above, I don't want nVidia to own ARM. I think that's not a good outcome. But I think it's even more destructive to society as a whole when governments have the power to meddle in these private transactions without having a REALLY good reason and proof beyond a reasonable doubt that harm will be caused. For example, if there were solid evidence than phone makers would lose access to ARM designs for their chips, that would probably qualify as a reason to block this. Maybe there is a REALLY good reason like that, but the vague, bland, and generic arguments I've heard so far, don't rise to that level for me.
  • Actually, you're mistaken that Freesync was inspired by G-Sync. It wasn't as Freesync is based on a Vesa standard which had Adaptive Synce incorporated in the design spec from around 2009. AMD effectively adopted Freesync and then improved upon on it. Secondly, I don't mean to be rude here but come on seriously? You are going to give a company a free pass in stifling competition and innovation? There is alot of solid evidence that Nvidia will engage in monopolistic practises - their own past practises. Instead of going "oh shoot, we should have been more stringent on Nvidia... oh well, next time another company comes along and tries to acquire something similiar, just you wait we'll be more stringent!". Governments and regulatory bodies most lever the full force of legal and regulatory powers to prevent monopolistic practises. Additionally, you are forgetting one crucial aspect if Nvidia acquires ARM then they can prevent designs from being thoroughly tested for security flaws. As they can 1)drag their feet in providing schemetics and associated software under the guise of intellectual property protection 2)similiarly, they can slow roll out specs to the ARMs current customers under the assertion of intellectual property protection and "ensuring competitive practises", they tried to pull that b.s with GPP (they used the term "transparency". https://techreport.com/news/26451/adaptive-sync-added-to-displayport-spe... You're not the average brick head that floats around the web like a rotten piece of trash. You know better, you know competition especially healthy competition fuels innovation. Additionally, everyone benefits from open standards (I mean everyone) - take USB for example. Sure, cabling capabilities is somewhat a mess but it's a damn side better than Apple locking everyone down into using the lightning connector - which mind you is still at USB 2.0 speeds. Apple is unable to improve their design for the lightning port because they locked themselves into that ecosystem. They will need to break compatibility in order to improve the lightning port. Where as by embracing the open usb standard 1) they don't upset their fan base, so they don't lose sales. 2)Their users finally get to use other peripherals not just products that carry the Apple premium, resulting in them being more productive (as there is a tonne of usb peripherals out there) and they save money. Thus, everyone benefits.
  • I yield to your greater knowledge on the history of FreeSync. I thought I recalled it came out after G-Sync, but I really don't know anything about the history of either beyond what was widely reported in the news at the time. I appreciate that you often educate the rest of us on these tech matters -- your TechFreak1 handle here is well deserved. :-) However, I disagree with the danger of monopolies that occur naturally. The only cases where monopolies have really been bad for consumers over more than a brief window (eventually, they fall to innovators who find a way around the monopoly), have been when they've been supported by government, often with widespread popular support. (e.g., AT&T had a phone monopoly before it was broken up, but that only stood due to laws preventing competition, similar with the steel and rail barons that Teddy Roosevelt broke up, or a modern equivalent that fortunately has not been realized, where Netflix lobbied for the benevolent-sounding "Net Neutrality," which would have stifled innovation among ISP and Internet delivery). Unless protected by laws, monopolies will always fall because they will either use the monopoly to stop investing in R&D (becoming stagnant) or to raise prices. Both of those create a fertile environment for clever entrepreneurs to find a way to leapfrog or undercut the monopolistic company. As Peter Drucker wrote, the allure of great margins causes dominant companies to keep prices too high, which in turn serves as an umbrella under which innovators can develop and prosper (recent example: think of Intel and AMD). A true monopoly just exacerbates this. It's the cycle of life in business that always topples the leader, if that leader abuses its position for an extended period. You point out that standards like USB are good. Clearly true. You also point out that monopolies are bad. Also true. But you know the best way to ensure a rock solid standard? A monopoly. If only 1 company makes all of the product, it can set and enforce whatever standard it wants. I would argue that protecting standards are not worth a monopoly. I think you would agree with that. There's a lot of interesting legal philosophy and economics (subjects I'm much more familiar with than technical subjects like G-Sync) behind this and obviously smart people can disagree depending on their individual priorities and preferences, but I view the long-term harm done to freedom from government meddling outweighs the short-term benefit to consumers. It's the unintended consequences of government interference that are the problem -- however noble the intent, government meddling and heavy regulations stifle innovation. They cause a transfer of R&D dollars to legal and accounting firms and lobbyists. Even when they claim to do the opposite, they always help the big established players who can afford the armies of lawyers and lobbyists at the expense of the entrepreneurs and innovators. The best way to avoid these heavy burdens is to keep government out of the way in the first place. That doesn't mean I think governments should never break up a monopoly or take steps to prevent one from forming. On the contrary, I support governments doing exactly that. It's just that the bar for government interference should be very, very high. As much as nVidia has not been a good player, I don't think this particular case reaches that high bar (though I would yield to your expertise on particulars -- if you could demonstrate that allowing this acquisition would stop Apple and Google from being able to make phones or cause other massive upheaval to the tech world, I would concede that the acquisition should be blocked, but if it's just an uneasy feeling based on past behavior, that's not enough for me).
  • Perhaps this is foreign to you, but some governments use their authority to ensure their citizens don't get screwed. Business can and should be managed to keep them from being too dominant
  • That is foreign to me, because it NEVER happens that way. Governments are fundamentally corrupt. That doesn't mean that everyone in government is corrupt or that they don't ever do good things, nor does it mean that there are no criminals in business (there certainly are, and they should be prosecuted and jailed), just that the incentives in government push toward corruption more than incentives in the private sector. Business are pushed to earn profits, which fundamentally means innovating and providing products and services that customers will want to buy. In contrast, governments are comprised of elected officials and bureaucrats. Elected officials work to re-election, which provides some protection against outrageous behavior, but mostly it drives pandering and pushing constituents to be angry, both despicable and corrupting incentives. Bureaucrats have even worse incentives: they gain power and prestige through a larger budget, which means their incentive is to spend and waste as much money as possible (so they get at least as much money the next year) and make their roles "essential." All of these are corrupting drivers. I'll take profit-seekers over governments every day of the week.
  • Why should Nvidia catch a break?
    They should be held to account just like any especially due to their past monopolistic practises. I for one do not want Nvidia getting their greedy mittens on ARM and locking it down behind their proprietary practises.
  • My OPINION aligns with that. I don't want nVidia to own ARM, because I think that would lead to less shared innovation by ARM's engineers and the broader industry, and consolidation generally reduces innovation a bit -- clearly those are negatives. Further, nVidia doesn't have a great track record in these areas. However, I have seen no proof that they are going to lock down ARM's technology in a way that would materially upend tech development (reduce it a little in the near term, sure, but that MIGHT just create incentives for competitors that are beneficial in the long-run). If there's no proof of major negative impact (is there any?), then I don't think our opinions (or those of our elected governments officials) should be allowed to interfere with a private transaction between nVidia and ARM's shareholders. There should always be a VERY high bar before my opinion should be allowed to force or prevent your behavior and vice versa. That's the difference between a dictatorial system that forces its will on private citizens and freedom, even if the dictatorial government is an elected one.
  • Well, Colin You've kinda put yourself in a quandry there as you... yourself said it Nvidia doesn't have a great track record. I don't think you're that naive to think Nvidia will have a christmas McScrooge moment and become all benevolent after they acquire ARM lol. In regards to the transaction, when it involves something of this magnitude then governments and regulator bodies must get involved regardless if it is a private transaction or not. By the way, Nvidia is a publicly traded company with shareholders not a private entity with owners. Therefore they are bound by rules and regulations that govern public traded companies. Not to mention, since Nvidia is a publicly trade company - the transaction is not a private transaction ergo not a purchase but an acquistion of assets. Such "assets" include employees therefore additional regulatory regulations apply. Plus there is also this factoid employees are citizens of different countries who elect government officials (which brings the socio-economics aspect into the mix - which in turn also has it's own associated rules and regulations - otherwise pretty much every country would still have a class based system - although it does exist in reality but it does not in the 'legal sense', ergo why those in the legal profession must remain impartial).
  • I addressed similar points to your other post and do disagree with your conclusions for the reasons explained there, but I can tell that I would LOVE to sit down and have a long discussion on this with you over a beer. I will admit this: there is no absolute right or wrong answer to this. People will reach conclusions based on their priorities. If you prioritize keeping near-term costs down, then you will conclude this acquisition, and most others too, should be blocked, due to the reduction in competition, and resulting price increases. On the other hand, if you prioritize long-term innovation and encouraging entrepreneurship, and believe that leads to even lower prices over the decades, as I do, even if that means accepting some short-term impact to consumers, then you'll conclude that governments shouldn't meddle like this absent clear evidence that could stand up in court for a conviction. In this case, is there such evidence that nVidia is going to cause a massive disruption to technology (not just mild price increases)? If yes, then I would agree that the acquisition should be blocked. Otherwise, I would oppose the government meddling. It's not that I don't care about the short-term hit to prices or particularly trust nVidia (I don't), it's that that's a lesser evil to me than to the massive and long-term harm caused by government meddling in innovative industries. That serves as a wet blanket to innovation, stifling it in unintended ways.
  • All of these commissions are hype and do nothing but squander taxpayer dollars who pay millions to watch clowns talk and say nothing.
    Decisions are always made in advance by those who have the money.
    And no doubt that nVidia will soon have ARM in its pocket, paid for in reality by the population, and that will just make another monopoly. And it will have cost at least a billion, the people of the commissions do not have the minimum salary, to come to this conclusion: ARM is nVidia. And during this time, we will cut even more for health and education. Food and shelter prices will continue to rise.
    The waiting lists for treatment will be even longer. We will always want to screw everything "private" (people pay all and received nothing, rich pay nothing and received just benefit).
    In short, the people will continue to pay more and more for having nothing and being on waiting lists. And the rich will pay nothing and will continue to monopolize the wealth of the world.
  • You have some things backwards: nVidia and ARM are both innovative companies who actually build and create things that improve the world. The government regulators who live on tax dollars create and contribute nothing. They just siphon money away from creators and builders to squander and waste in their meetings and talk and self-aggrandizement.