FTC raises concerns over Nvidia’s Arm purchase

US worries mirror concerns in UK and Europe

Nvidia has admitted the Federal Trade Commission (FTC) has raised concerns over its acquisition of UK chip company Arm, just days after the UK government launched an in-depth probe into the deal. 

The company made the admission during its Q3 earnings call. 

"Regulators at the US FTC have expressed concerns regarding the transaction and we are engaged in discussions with them regarding remedies to address those concerns," said Colette Kress, executive vice president and chief financial officer at Nvidia

"The transaction has been under review by the China Antitrust Authority, pending the formal case initiation," she continued, pointing to equal concern in the UK and EU, where regulators have not yet approved the deal, citing competition concerns. 

"Despite these concerns and those raised by some Arm licensees, we continue to believe in the merits and the benefits of the acquisition to Arm, to its licensees and to the industry," she added. 

Nvidia announced the $40 billion acquisition of Arm in September 2020, but it has been dogged by government worries ever since. The UK's Competition and Markets Authority (CMA) announced an investigation of the deal in January and raised antitrust concerns in August. On Monday, the UK government ordered a more in-depth investigation of the deal, taking into consideration competition and national security issues. 

If it goes ahead, the deal will give Nvidia strong footing in the data center industry. 

Oracle announced a set of Arm-based instances as part of its cloud service in January. Arm processors are also gaining traction on endpoints thanks to the huge success of Chromebooks and Apple's switch to an Arm-based architecture for its home-grown M-series processors. The rise of internet of things (IoT) systems also bodes well for Arm, which excels at low-footprint power-efficient processors. 

Nvidia announced record revenues of $7.10 billion, up 50% year on year. GAAP earnings per share were up 83% from Q3 last year to 97 cents.

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