Major Tech Companies Rally Against the Nvidia – ARM Deal

04-03-2021 | By Robin Mitchell

Recently, major tech companies including Qualcomm, Microsoft, and Google have announced their objection to the overtaking of ARM by Nvidia. What deal has Nvidia and ARM made, why is it under investigation, and what could it mean for the tech industry?

NVIDIA Moves to Purchase ARM

Back in September 2020, NVIDIA announced to the world that it would purchase ARM Holdings. The majority shareholder of ARM Holdings, SoftBank, would receive $40 billion for most of the shares, but SoftBank would still retain 10% of shares. 

According to Nvidia, they would retain the ARM branding, effectively allow ARM to continue with their day to day operation, and not stand in the way of ARMs independent nature. Furthermore, Nvidia hopes to be able to utilise ARM technology with their GPU capabilities while also potentially gearing future ARM core development to work better with Nvidia GPUs.

While the purchase is still on hold, there have been numerous blockades in the way of Nvidia, with one being the refusal of a Chinese CEO to leave his position in the Chinese branch of ARM Holdings. However, not only is the deal being investigated by multiple agencies including the FTC in the US and the CMA in the UK, there are others now speaking out against the deal that could put the takeover in jeopardy.

Major Tech Giants Speak Out

Recently, major tech giants including Qualcomm, Microsoft, and Google have made announcements that they are in opposition to the takeover of ARM by Nvidia. Furthermore, it is believed that China will also oppose the deal and many smaller companies such as Graphcore in the UK.

According to tech giants, if Nvidia can gain control of ARM, it would have an unfair advantage in the semiconductor market. If a non-tech investor purchased the controlling interest of ARM, they would have full incentive to maximise the reach of ARM. However, since Nvidia is a semiconductor company that produces products that compete against others that integrate ARM tech, they would in effect be able to impact competitors ability to produce products seriously.

How the Takeover of ARM Could Spell Trouble for the Whole Industry

Such complaints would be expected from companies such as Intel and AMD. Still, complaints coming from tech companies such as Microsoft and Google suggests that the purchase of ARM would affect far more than just semiconductor industries. 

While software tech companies do not compete in the semiconductor industry, their entire existence relies on it. Thus, if devices that utilise ARM technology are impeded due to restrictions placed by Nvidia, the software that runs on said devices will also be harmed.

Examples of how Nvidia can harm software developers include restricting access to the latest ARM technology on devices, and restricted access to features in ARM compilers. Furthermore, the negative impact of limiting ARM technology to competitors can potentially lead to technology stagnation and higher cost of devices, thus increasing costs for software developers. 

Is there much to worry about?

There is a good chance that the deal between Nvidia and ARM Holdings will be rejected on anticompetitive behaviour grounds. Considering that Nvidia is a semiconductor company with competitors that use ARM technology, it gives a large amount of power to Nvidia. 

However, if the deal is allowed, it is more likely that Nvidia will use the ARM purchase to give itself primary access to the latest ARM technology and the power to give ARM a different direction that will see Nvidia benefit. 

A deal does not mean that Nvidia would restrict competitors in obtaining ARM tech at competitive prices, nor would it automatically see Nvidia attempt to crush its competition by outright intervening in tech deals between ARM and other semiconductor companies. If Nvidia tried to make any anticompetitive moves, it would light extremely fast considering the size and nature of ARM. Such action would undoubtedly harm Nvidia and ARM. 

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By Robin Mitchell

Robin Mitchell is an electronic engineer who has been involved in electronics since the age of 13. After completing a BEng at the University of Warwick, Robin moved into the field of online content creation, developing articles, news pieces, and projects aimed at professionals and makers alike. Currently, Robin runs a small electronics business, MitchElectronics, which produces educational kits and resources.