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Setback for Nvidia’s $54 billion ARM bid as EU regulators open probe -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – The Nvidia logo is seen in Santa Clara at the headquarters of Nvidia, California on February 11, 2015. REUTERS/Robert Galbraith/File Photo

By Foo Yun Chee

BRUSSELS, (Reuters) – Nvidia (NASDAQ) was hampered by EU antitrust regulators opening an investigation into the $54 billion deal for British chip manufacturer ARM. This probe is based on fears that it could result in higher prices and less innovation.

The deal is being investigated by Britain’s competition authority. It has warned that the agreement could harm competition and make it more difficult to compete.

Reuters reports that the European Commission considered the concessions made by the largest maker of artificial intelligence (AI), and graphics chips in the world inadequate during its initial review.

Nvidia did not disclose the details, but previously stated that it would keep ARM neutral to address concerns of customers like Qualcomm (NASDAQ) Inc., Samsung Electronics(OTC:) Co Ltd. and Apple Inc. (NASDAQ).

According to the Commission, it will decide whether or not to approve or deny the agreement by March 15.

Margrethe Vestager from the EU competition chief said that Arm and Nvidia are not in direct competition. “Arm and Nvidia may not compete directly, but Arm’s IP is an essential input in products competing against Nvidia in datacentres or automotive and in Internet of Things,” she stated.

She continued, “Our analysis has shown that Arm could be acquired by Nvidia and restrict or degrade Arm’s IP access.”

Backers include ARM customers Broadcom, MediaTek and Marvell (NASDAQ :).

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