Qualcomm, one of the leading chip manufacturing companies in the globe, has informed regulators about the fact that it strongly opposes the acquisition of ARM, a chip design, by Nvidia.
While the two companies have come very close to closing the deal, it has been scrutinized and criticized by several other players in the market. Qualcomm is one company that has made its disapproval over this acquisition public. According to a report published on CNBC, Qualcomm has even gone to the extent of getting its objections registered with different bodies like the European Commission, the Federal Trade Commission, and a bunch of other agencies in China and the United Kingdom.
Qualcomm, which has its headquarter in San Diego, is believed to have an objection to ARM being acquired by Nvidia as it fears that Nvidia might start exercising too much control on the chip technology used by ARM. According to Qualcomm, many in the trade are worried about Nvidia ‘crossing certain lines’ once it enters the deal and that is something that is most likely to happen.
The FTC has been investigating the details of the acquisition for some time and now, the investigation procedure is in its ‘second phase’. In this phase, the FTC is trying to gather more information on this deal by speaking to Nvidia and ARM, the two parties involved in this deal. The process of investigation could last for several months as it involves gathering information from multiple sources and a large amount of paperwork.
As per CNBC, industry experts are of the opinion that there is a high possibility of the deal getting obstructed by one of the regulators. While Nvidia is aware of the buzz in the market and the concerns regarding the deal, it believes that it would not face any issue from any of the regulators.
However, Qualcomm does admit that the opposing forces will play an important role in determining whether the deal can be finalized or not. Some of the other organizations that have shown resistance to the acquisition are Huawei and Graphcore.
A large number of companies, including Apple, obtain a license from ARM to use its chip designs. Apple’s A-Series chips and its newly launched M1 Mac chip are based on these designs. There is a lot of chatter in the market about Nvidia making it difficult for its competitors from procuring chip designs from ARM once the deal is signed. Nvidia, on its part, has assured that nothing of this kind will happen.
After signing the deal, Nvidia and ARM have mutually agreed upon setting up the headquarters of the “computing company” they will create together in the United Kingdom.