The European Union and Great Britain have launched an investigation into Nvidia’s intended acquisition of Arm. Several parties are concerned that the acquisition will come at the expense of Arm’s neutrality.

Officials and advisers in both Brussels and the UK have said that extensive scrutiny of the deal is needed as Arm’s designs become increasingly important, writes the Financial Times. Arm chips have been deployed in smartphones for years and are also finding wider support in other devices.

In September, Nvidia announced its intention to acquire Arm for 40 billion dollars (33 billion euros). This caused concern among many parties, as the takeover could result in Nvidia receiving preferential treatment for Arm chips. Nvidia itself makes Arm-based SoCs and could potentially get new technologies earlier or cheaper when Arm releases them.

Loss of neutrality

“The overarching worry is the loss of neutrality of Arm. At the moment the company is very neutral in its packages with its customers. But the worry is that in the medium and long term Nvidia will use Arm to disadvantage other companies and pump up its own technology,” a concerned competitor told the Financial Times.

The investigations are still at an early stage. The UK Competition and Markets Authority has asked market players for their views and promises to launch a formal investigation in the coming months. In Brussels, officials are still working out the paperwork.

Unjustified

Nvidia itself says that the concerns are unjustified. In a letter to the Financial Times, Jensen Huang, CEO of Nvidia, writes that the company will absolutely stick to the open licence model of Arm. “We have no intention to ‘throttle’ or ‘deny’ Arm’s supply to any customer,” he said.

It has long been known that the British competition watchdog has launched an investigation into the takeover. The watchdog is concerned that such a takeover would have security implications due to the high importance of Arm.

Tip: Why the acquisition of ARM by Nvidia should be prohibited