According to analysts, Nvidia’s acquisition of Arm is “very unlikely.”

Nvidia Corp. Jen-Hsun Huang, President and Chief Executive Officer, will speak at the company’s event at Mobile World Congress Americas on October 21, 2019 in Los Angeles.

Patrick T. Fallon | Bloomberg | Getty Images

According to Gartner semiconductor analyst Alan Priestry, Nvidia’s $ 40 billion acquisition of British chip designer Arm is increasingly unlikely to happen.

According to Priestley, the deal is facing more and more regulatory investigations around the world, pointing out concerns in the UK, EU, US and China.

“I think it’s very unlikely that it will pass,” Priestley told CNBC on Wednesday. Nvidia and Arm did not immediately respond to CNBC’s request for comment.

The deal was expected to close by March 2022, but Nvidia CEO Jensen Huang confirmed in August that it would probably exceed that date.

Arm spun out of an early computing company called Acorn Computers in 1990. The company’s energy-efficient chip design is used in 95% of smartphones worldwide and 95% of chips designed in China. Acquired by Softbank in Japan for £ 24 billion ($ 32 billion) in 2016, the company licenses chip designs to more than 500 companies that use them to manufacture their semiconductors.

Critics say the merger with Nvidia, which designs its own chips, will limit access to Arm’s “neutral” semiconductor designs, which could lead to higher industry prices, fewer options, and less innovation. I am concerned. However, Nvidia argues that the deal will lead to more innovation and Arm will benefit from increased investment.


US chip giant Broadcom has come out in favor of the deal, but many others are against it.

Rival Qualcomm says Nvidia may limit the supply of Arm’s technology to competitors or raise prices. According to Bloomberg, Google and Microsoft have raised the same concern with regulators.

In November, the British government announced that it wanted to conduct a full-scale investigation into the acquisition of Arm, which is headquartered in Cambridge and is widely known as the pinnacle of technology in the UK.

Digital Culture Secretary Nadine Dorries has ordered the deal to be “Phase 2”. The investigation, conducted by the Competition and Markets Authority over a 24-week period, investigates antitrust concerns and national security issues.

In the United States, the Federal Trade Commission is also concerned about this transaction. Nvidia said in its fourth-quarter earnings call that it was discussing “a bailout to address these concerns” with authorities.

Meanwhile, the European Commission, the EU’s executive body, launched its own detailed investigation into the transaction in October.

“Although Arm and Nvidia do not compete directly, Arm’s IP is an important input in products that compete with Nvidia’s products, such as data centers, automobiles, and the Internet of Things,” said Margre the Vestager, Executive Vice President of the European Commission. States as follows. statement. “According to our analysis, Nvidia’s acquisition of Arm could limit or reduce Arm’s access to IP and have a distorting impact on many markets where semiconductors are used.”

In China, a state-backed Global Times said the deal was “confused” and urged regulators to treat it with caution.

Arm IPO?

People have been wondering if a transaction would be allowed by a regulatory agency since it was first announced.

Last October, tech investors Ian Hogarth and Nathan Benaich were one of the first to publicly predict that they would be blocked.

“I wouldn’t be surprised if someone blocks me,” Hogarth told CNBC at the time, when he sold the startup Songkick to Warner Music Group before becoming an angel investor.

King’s College, Cambridge is depicted as abandoned due to an outbreak of the coronavirus.

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Talking to CNBC this week, Gartner’s Priestley said SoftBank is likely to try to list Arm on the stock market if Nvidia’s deal fails.

“They will probably try to IPO it,” he said.

The London Stock Exchange and the Nasdaq stock market in New York are two potential listings, but Priestley said he wasn’t sure how well Arm alone would work.

“The problem Arm has, and this is the problem SoftBank is facing, and how it makes money,” Priestley added. “IP licenses are great, but it’s really hard to put pressure on them.” According to analysts, Nvidia’s acquisition of Arm is “very unlikely.”

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