NVIDIA’s acquisition of Arm has been a controversial deal from the very beginning but the British government’s decision to intervene in the takeover has cast doubts over whether it will be actually approved or not. The antitrust investigation into the NVIDIA-SoftBank deal will determine whether the acquisition is a threat to the country’s national security, and decide its course depending on the result. Analysts are divided over the outcome, with some claiming that it won’t be approved while the rest of the opinion that the matter is already done and dusted, with only the formalities, pending.
As per Citigroup analysts, NVIDIA’s chances of acquiring the British chipmaker are pretty low now that the company has officially announced its own Arm-based CPU in the form of Grace. The group estimates that the deal has only a mere 10% chance of being approved after the Santa Clara-based chipmaker’s intentions have been made clear with the GTC 2021 announcements. The reason being that Grace, an Arm-based design will be competing with products from other licensees/clients. Only NVIDIA will be getting preferential treatment as a result of being the parent company and thereby not playing fair.
Oliver Dowden, UK Digital Secretary released a Public Interest Intervention Notice (PIIN) over the takeover on Monday, raising concerns that the said deal is a danger to national security. NVIDIA, being a US-based company has to comply with national laws, and the ongoing trade war with China has proved just how important the semiconductor industry really is. The antitrust investigation is expected to be finished by the end of July.
NVIDIA purchased Arm from SoftBank for nearly $40 billion, with $20 billion offered in cash and the rest in the form of company shares and other assets. The acquisition is expected to reach its conclusion by 2022 but is still pending approval from antitrust agencies in the US, UK, EU, China, Japan, and Korea. NVIDIA CEO, Jensen Huang recently said in an interview that he’s confident the deal will be approved by the respective agencies as it’s beneficial for both companies.