Qualcomm has reportedly objected to NVIDIA's $40 billion acquisition of ARM

The chipmaker worries NVIDIA won't let ARM licenses its processor designs to other companies.

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TOKYO, JAPAN - JULY 20:  SoftBank Group Corp. Chief Executive Officer Masayoshi Son, left, shakes hands with ARM Holdings Plc Chief Executive Officer Simon Segars during the SoftBank World 2017 conference on July 20, 2017 in Tokyo, Japan. With 70 speeches and sessions, the annual business event hosted by SoftBank, Japan's multinational telecommunications and internet company, takes place for 2 days until July 21. (Photo by Tomohiro Ohsumi/Getty Images)
Tomohiro Ohsumi via Getty Images

According to CNBC, chipmaker Qualcomm has quietly objected to NVIDIA's proposed $40 billion acquisition of ARM. The company reportedly told the Federal Trade Commission (FTC), as well as its regulatory counterparts in the UK, EU and China, it has concerns about the impending takeover. Specifically, Qualcomm is said to oppose the purchase because it believes NVIDIA would prevent ARM from licensing its processor architecture designs to other companies. ARM currently allows more than 500 companies, including Qualcomm, to use its tech.  

"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 told CNBC. "Our vision for ARM will help all ARM licensees grow their businesses and expand into new markets." We’ve reached out to Qualcomm for comment.

According to CNBC, the FTC recently asked ARM, current owner SoftBank and NVIDIA to provide additional information and documentation, a process that could take months. It's also talking to companies that may have insight that could inform an eventual decision. "You're looking at a very thorough, a very painful, and a very long investigation," a source told the network.  

Ultimately, NVIDIA's intentions for ARM may not play as important a role in the decisions regulators make as the company's current business model. ARM is unlike almost any other entity in tech. Its licensing model allows companies like Qualcomm, Apple and Samsung to use its processor architecture designs and build chips that are all more or less competitive with one another.

Politics could just as quickly scuttle the acquisition. In the US, there's support on both sides of the political spectrum to rein in big tech. It was only earlier this month that Senator Amy Klobuchar introduced legislation that would make it more difficult for companies like NVIDIA to acquire smaller firms if it were to pass. Even if the FTC were to approve the deal, it would still need to pass even more difficult regulatory hurdles in China. All signs point to the country opposing the acquisition on the grounds that it would hand control of a company that is critical to the competitiveness of homegrown tech giants like Huawei to a US firm, thereby including it in the ongoing trade war between the two countries.

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