Collapse of Nvidia-Arm $66B Chip Deal Shows More Than Antitrust Woes

Nvidia Corp. and Arm Limited announced on Feb. 7 that they will not continue with the transaction due to “significant regulatory challenges.” This statement ends an attempted merger that started in September 2020 when the U.S. graphic chip giant agreed to buy Arm from SoftBank in what could have been the chip industry´s biggest deal. But besides antitrust concerns, a growing fear among policymakers of not having access to this essential technology may have played a bigger role. 

The deal raised concerns among regulators and chip makers rivals from the beginning. Regulators in Europe and the U.K. quickly opened a second-phase investigation due to the concerns they found in the initial investigations. The U.S. Federal Trade Commission also sued to block the transaction in December 2021. Yet, the collapse of the deal comes before any of the regulators, or a judge in the case of the FTC, adopted a final decision on antitrust grounds. 

The main concern among regulators was that Nvidia, after the transaction, would have the ability and incentives to restrict access to its rivals to Arm´s technology, which would eventually lead to higher prices, less choice and reduced innovation. 

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