EU regulators open probe into Nvidia's $53 billion ARM bid

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EU regulators open probe into Nvidia's $53 billion ARM bid

Nvidia suffered another setback on Wednesday as EU antitrust regulators opened a full-scale investigation into its US$40 billion (AU$53 billion) bid for British chip designer ARM on concerns the deal could lead to higher prices, less choice and reduced innovation.

Britain's competition agency is also probing the deal for the country's most important technology company, warning that it could damage competition and weaken rivals.

Reuters reported the European Commission viewed as insufficient concessions offered by the world's biggest maker of graphics and artificial intelligence (AI) chips during its preliminary review.

Nvidia has not disclosed what these are but it has previously said it would maintain ARM as a neutral technology supplier to soothe concerns from customers such as Qualcomm Inc, Samsung Electronics Co Ltd and Apple Inc.

The Commission said it would decide by March 15 whether to clear or block the deal.

"Whilst Arm and Nvidia do not directly compete, Arm's IP is an important input in products competing with those of Nvidia, for example in data centres, automotive and in internet of things," EU competition chief Margrethe Vestager said in a statement.

"Our analysis shows that the acquisition of Arm by Nvidia could lead to restricted or degraded access to Arm's IP, with distortive effects in many markets where semiconductors are used," she continued.

ARM customers Broadcom, MediaTek and Marvell are backers of the deal.

Intel, Nvidia rival and occasional collaborator, recently ended discussions with ARM rival SiFive about a US$2 billion deal to acquire the chip design startup.

It was reported that discussions broke down after the two companies could not reach an agreement on financial terms and how Intel would integrate SiFive’s technology into its roadmap. SiFive said that Intel remains an important partner.

(Reporting by Foo Yun Chee Editing by Philip Blenkinsop and Mark Potter)

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