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Summary
- Experts believe that the deal would limit other tech companies from accessing the latest processor designs that are used in a variety of applications.
- Nvidia Corp is willing to enter a legally binding agreement for honouring Arm deal commitments.
US-based computer systems design services company Nvidia Corporation (NASDAQ:NVDA) has got fresh resistance from Microsoft-backed Graphcore, which is an AI accelerator and machine learning chip developer, regarding the acquisition of British design house Arm Ltd.
Also read: UK Chip Designer ARM to Be Acquired by Nvidia In the Largest Tech Deals of The Year
Nvidia’s acquisition of Arm Holdings from Japanese tech giant SoftBank has been opposed by UK based chip designer,
According to Hermann Hauser, a key member of the British chipmaker, Arm Holdings, chip designer Graphcore has opposed Nvidia’s acquisition of Arm Holdings from Japanese tech giant SoftBank as it is believed to be “anti-competitive”. Therefore, Graphcore has requested the apex authority in UK, CMA to block the $40-billion deal.
The merger of the two tech giants shall lock out other companies from entering the seller market. Industry experts believe that the deal would limit the other technology companies from accessing the latest processor designs that are used in a variety of applications. However, Graphcore and the CMA haven’t made any further comments on the acquisition.
Arm is one of the leading companies in the semiconductors sector and supplies chips to global technology giants across the world. More than 90 per cent of the world’s smartphones use Arm’s energy-efficient chip architectures, and a majority of them are designed in China. Sector experts believe that Nvidia will restrict the access to Arm’s chip designs.
Nvidia’s spokesperson said that the company is eager to maintain Arm’s open license model and its customers will be able to integrate Arm designs with their own accelerators and peripherals. Nvidia seems to be confident that the acquisition will benefit the entire tech ecosystem.
However, Hauser is worried that Nvidia would ruin the Arm’s business model. In response to this concern, Nvidia Corp is willing to enter a legally binding agreement for honouring Arm deal commitments and is in discussion with the British government.
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The potential acquisition, which is believed to create the world’s premier computing company for the age of AI, has been drawing flak since it was announced in September 2020 and has been termed as a disaster for the UK.
Widespread opposition
Apart from Graphcore, Chinese chipmakers, including Huawei, have urged the Chinese government to oppose the deal. The Chinese chipmakers could be at a disadvantage if the deal is through, due to exacerbated relations with the US.
According to some media reports, the deal is being thoroughly investigated by the market regulators. Sector experts opine that the probability of the deal being blocked by regulators has gone up.
In the past one year, shares of Nvidia have more than doubled due to pandemic induced remote working culture picking up the steam.
