Nvidia-Arm Deal Faces Concerns From Microsoft, Google, Qualcomm: Reports

The concerns focus around Arm’s historic open-licensing model for silicon designs, which allows companies like Qualcomm, Microsoft and Google to license IP to build their own processors. Nvidia insists that it will keep Arm’s licensing model open, echoing a promise made by CEO Jensen Huang last year.

Nvidia’s plan to acquire Arm for $40 billion is reportedly facing scrutiny from Microsoft, Google and Qualcomm as regulators across the world examine whether the blockbuster deal would hurt competition in the semiconductor industry if approved.

CNBC reported last week that Qualcomm has voiced its opposition to the deal to the Federal Trade Commission, the European Commission, the U.K.’s Competition and Markets Authority and China’s State Administration for Market Regulation, all of which are reviewing the proposed acquisition.

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Bloomberg reported that Microsoft and Google also have their concerns about the deal, which was announced last September as part of Nvidia’s bid to become the “world’s premier computing company.” Both reports cited sources familiar with the matter.

The concerns focus around Arm’s historic open-licensing model for silicon designs, which allows companies like Qualcomm, Microsoft and Google to license IP to build their own processors. Qualcomm has been a long-time licensee, using Arm designs as the basis for its smartphone and laptop processors. And Microsoft is reportedly working on Arm-based chips for new Azure cloud instances and Surface PCs.

Qualcomm is concerned that Nvidia could renege on its promise to keep Arm’s open-licensing model and prevent other chipmakers from licensing Arm designs because Nvidia wouldn’t otherwise be able to fully realize the value of such a major investment, sources told CNBC.

However, Nvidia insists that it will keep Arm’s licensing model open, echoing a promise made by Nvidia CEO Jensen Huang when the deal was announced.

“As we proceed through the review process, we’re confident that both regulators and customers will see the benefits of our plan to continue Arm’s open licensing model and ensure a transparent, collaborative relationship with Arm’s licensees,” an Nvidia spokesperson said in a statement to CRN. “Our vision for Arm will help all Arm licensees grow their businesses and expand into new markets.”

Arm declined to comment.

Microsoft, Google and Qualcomm, who did not respond to requests for comment, aren’t the only companies that have reportedly expressed concerns about the Nvidia-Arm deal.

Nigel Toon, the CEO of Bristol, U.K.-based Graphcore, which sells AI chips that compete with Nvidia GPUs, told CNBC in December that Nvidia acquiring Arm “risks closing down or limiting other companies’ access to leading-edge CPU processor designs, which are so important across the technology world, from data centers, to mobile, to cars and in embedded devices of every kind.”

Huawei and other Chinese technology companies are also concerned about retaining access to Arm technology, Bloomberg reported last October.