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Nvidia Arm Deal Faces Deeper Probe by European Regulators – HPCwire

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Since 1987 – Covering the Fastest Computers in the World and the People Who Run Them
Since 1987 – Covering the Fastest Computers in the World and the People Who Run Them
By Todd R. Weiss
October 28, 2021
With continuing concerns about the potential for stifled competition in Nvidia’s proposed $40 billion acquisition of Arm, the European Commission (EC) is opening an “in-depth investigation” into the matter to give itself more time to review the potential transaction.
The EC announced its move on Oct. 27 after conducting an earlier investigation that determined that there are still questions that need to be answered before the EC issues a decision in the case.
“The commission is concerned that the merged entity would have the ability and incentive to restrict access by Nvidia’s rivals to Arm’s technology and that the proposed transaction could lead to higher prices, less choice and reduced innovation in the semiconductor industry,” the agency said in a statement.
“Following its preliminary investigation, the commission considers that Arm has significant market power on the market for the licensing of Central Processing Unit (CPU) IP for use in processor products,” the statement continued. “Therefore, the commission has concerns that the merged entity would have the ability to restrict or degrade access to Arm’s technology by providers of processor products that Nvidia may compete with [in the marketplace].”
Those concerns surround hardware including data center CPUs, smart network interconnects (SmartNICs), semiconductors for automotive advanced driver-assistance systems (ADAS), SoCs and other systems, according to the EC. The EC’s in-depth investigation will be conducted under the European Union’s Merger Regulation and the EC said it expects to issue a decision by March 15, 2022, which is 90 working days from its latest ruling.
“Semiconductors are everywhere in products and devices that we use every day as well as in infrastructure such as data centers,” EC executive vice president Margrethe Vestager, who is responsible for competition policy, said in a statement. “Whilst Arm and Nvidia do not directly compete, Arm’s IP is an important input in products competing with those of Nvidia, for example in data centers, automotive and the internet of things (IoT).”
The group’s analysis shows that the acquisition of Arm by Nvidia could lead to restricted or degraded access to Arm’s IP, with distorted effects in many markets where semiconductors are used,” said Vestager. “Our investigation aims to ensure that companies active in Europe continue having effective access to the technology that is necessary to produce state-of-the-art semiconductor products at competitive prices.”
The EC’s upcoming investigation will look at the effects of the proposed acquisition to determine whether the group’s initial competition concerns regarding these markets are confirmed.
One of the main concerns of the commission is that Arm licensees might be reluctant to continue sharing commercially sensitive information with the merged entity because they are competing with Nvidia, the statement continued. Another concern for the commission is that after a merger Nvidia could refocus some of Arm’s R&D spending on products that are most profitable for Nvidia downstream, to the detriment of players heavily relying on certain Arm IP in other areas, the agency said.
The commission said it will continue to work closely with similar competition authorities around the world as it pursues its new in-depth investigation of the matter.
In a statement to EnterpriseAI, an Nvidia spokesperson said the company is “working closely with the European Commission through the regulatory process. We look forward to the opportunity to address their initial concerns and continue demonstrating that the transaction will help to accelerate Arm and boost competition and innovation, including in the EU.”
An Arm spokesperson declined to comment on the regulatory matters and deferred comments to Nvidia.
Several IT analysts reacted to the latest EC news with varying degrees of pessimism or optimism about the ultimate decision from the agency.
“I have said all along that the acquisition of Arm by Nvidia has a real potential to negatively affect all of the Arm licensees, many of which would be in direct competition with Nvidia in the graphics and AI space,” said Jack E. Gold, president and principal analyst with J. Gold Associates, LLC. “Nvidia has stated that it would not get in the way of Arm’s current business model and freely license their technology as usual. But how would we know if the influence of Nvidia was driving Arm R&D and engineering in a particular direction to benefit Nvidia over the Arm licensees?”
Such moves could be either subtle or blatant, and leave no way to know for sure, said Gold. “So, the EC is correct – the result could lead to less competition as Arm is the engine behind so many products and companies. I think the stated goal of Nvidia to acquire Arm so it can license its IP through Arm channels could be accomplished without the outright acquisition of Arm.”
Also notable, said Gold, is that some companies are already looking at alternatives to Arm, such as RISC-V or the Open Compute Project, to prepare if the acquisition goes through and they lose access to the semiconductor IP they relied on in the past.
“But these alternatives are nowhere near as complete or have as many functional components as Arm does, so it is not a great solution for many current licensees, besides which changing out a complete architecture for a new one is a huge effort,” said Gold. “And the fact that so many of the key chip companies, including Arm licensees, are opposed to this deal have given more impetus to the EC review.”
In the end, said Gold, he still does not see the merger happening. “My ultimate guess is, having come this far and with the increased scrutiny that the EC is bringing to the deal, it is now a long shot to be completed.”
Another analyst, Patrick Moorhead, principal analyst with Moor Insights & Strategy, said the new in-depth EC investigation is not a surprise at all, but that is not the only potential stumbling block for the deal.
“When the deal was announced I thought China and the EU would be challenges,” said Moorhead. “I have confidence that the deal will go through in the EU with some Nvidia concessions, but China is still a crapshoot.”
One analyst, however, ​​​​​Karl Freund, the founder and principal analyst at Cambrian AI Research, said he thinks the latest EC action is uncalled for in this case.
“These concerns assume that the combined entity would be stupid enough to undermine the value of Arm by taking these actions,” said Freund. “This would play into the hands of RISC-V, which would actually spur competition. These concerns are downright silly.”
Nvidia announced its $40 billion acquisition offer for Arm in September of 2020, which has set a cascade of events in motion. Several major tech companies, including Google, Microsoft and rival chipmaker Qualcomm, have continued to vocally oppose the deal, issuing repeated concerns about its negative effects on competition and pricing.
But in June of 2021, three other chip companies – Broadcom, Marvell and MediaTek – backed the acquisition and began publicly saying that they see the move as one that could ultimately benefit their own businesses.
The Nvidia acquisition of Arm was set up when Japanese technology investment company Softbank, which bought Arm in July of 2016 in a $32.25 billion all-cash deal, chose to sell the company after hemorrhaging cash since the first quarter of 2020. Softback had been looking to sell off assets to raise money after the company’s earlier bets on the rise of connected devices failed to pay off. The company’s Vision Fund, its AI investment fund, reportedly suffered a $13 billion annual loss in its fiscal year ending in March 2020.
Acquiring Arm would solidify Nvidia’s standing as a major player in wireless and other markets as it makes steady inroads in enterprise data centers. The graphics leader has released a stream of ever-more powerful GPUs targeting machine learning and other AI workloads that now dominate corporate data centers.
The Nvidia Arm acquisition proposal has taken on more interest this year due to the global chip shortage and increased compute demands for AI, machine learning and other technologies in response to the COVID-19 pandemic, according to a recent Datanami story. Chip production slowdowns and component shortages caused by pandemic-related shutdowns around the world have contributed to the problems, putting pressure on a wide variety of chip-starved industries.
In August, Nvidia’s Arm acquisition plans hit a major roadblock after a report from a U.K. regulatory agency criticized the deal, saying it could “lead to a realistic prospect of a substantial lessening of competition” in the globally-important chip industry.
The 10-page executive summary of the report, which was issued by the U.K.’s Competition and Markets Authority (CMA), was delivered to U.K. Digital Secretary Oliver Dowden in response to his April order for a Phase One inquiry into the proposed acquisition of U.K.-based Arm. Dowden’s order specified that the CMA evaluate the deal on competition grounds and report back to the government. The executive summary, which was released Aug. 20, is being provided by the government ahead of the full CMA report.
“The CMA found significant competition concerns as a result of the effect of [the proposed acquisition] in the supply of CPUs, interconnect products, GPUs and SoCs across several global markets, spanning the data center, internet of things, automotive and gaming console applications,” the report states.
According to the report, Dowden, who is the digital secretary for the U.K. Department for Digital, Culture, Media & Sport, will now decide whether he should order a deeper Phase Two investigation by the CMA into these concerns. There is no set period or deadline for him to issue such an order, “but it must take into account the need to make a decision as soon as reasonably practicable to reduce uncertainty.”
The U.K. government has also separately been considering the national security implications of the transaction, according to the executive summary.
This story first appeared in sister publication EntepriseAI.news.
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Ubisoft NFTs, called 'Digits', launch for in-game items – BBC News

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Game titan Ubisoft has announced its new system to bring NFTs to its in-game items, starting this week.
Non-fungible tokens have exploded in popularity, and are widely used for digital art collectibles.
Ubisoft's system – called "Digits" – will be offered as in-game digital items with one-of-a-kind serial numbers, which can be bought and sold.
Critics argue NFTs are bad for the environment, while offering little benefit over traditional systems.
Ubisoft – famous for games such as the Assassin's Creed, Far Cry and Rainbow Six series – is the most significant game developer and publisher to launch an NFT project yet.
The company claims it has addressed the environmental problems associated with blockchain technology.
Its in-game NFTs will be stored on the Tezos blockchain, which it claims is far more energy-efficient than other options.
But the use of NFTs in gaming remains controversial, with many players and designers believing they are only considered as a way to make money, rather than providing players with any benefit.
Ubisoft's first batch of Digits will launch with "limited editions" – of a fixed number of in-game digital items – for the company's game Tom Clancy's Ghost Recon Breakpoint, on Thursday. They can be paid for with crypto-currency, but only in the launch countries of USA, Canada, Spain, France, Germany, Italy, Belgium, Australia and Brazil.
Many games – especially free-to-play ones such as the popular Fortnite or Warzone titles – make a large chunk of their money through selling in-game cosmetic items or "skins" that change the look of characters or items.
Ubisoft is applying the NFT technology to this game mechanic, and calling its overall ecosystem "Quartz".
NFTs are always unique in some way, but in-game cosmetics are identical for every player who gets a copy. Ubisoft's solution is to put a unique serial number on these digital items.
In one example shown by the company, a digital helmet worn by a character appears to have a serial number "stamped in" to the metal in its appearance – a number Ubisoft says will be different for every owner.
That serial number will be visible in-game to other players, and each player can only own one of each "Digit" NFT, Ubisoft said.
These Digits can then be bought and sold with crypto-currency like any other token on the blockchain – even for those who do not own or play Ubisoft's games. The items will also list previous owners in-game, it said.
"With Digits, items are no longer bound to a player's game inventory since they can be put on sale for other eligible players to acquire on third-party platforms outside of the Ubisoft ecosystem," it said.
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The company is characterising the entire release as a "large-scale experiment" and says it has been exploring blockchain technology for four years.
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Traditional crypto-systems use what's called "proof of work" which involves powerful computers doing extremely intense calculations to verify transactions. Tezos uses a different system, called "proof of stake".
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This Custom Miles Morales PS5 Controller Looks Incredible – GLITCHED

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A custom Spider-Man: Miles Morales PS5 DualSense controller is making the rounds online, and it looks incredible. Created by digital artist Giuseppe Spinelli in collaboration with LetsGoDigital, the striking controller is simply a concept artwork that coincidentally arrived with the launch of the first trailer for Spider-Man: Across The Spider-Verse (Part One).
The Miles Morales-themed DualSense controller was originally created to celebrate the launch of Insomniac’s Spider-Man: Miles Morales on the PS5, but only surfaced recently. Spinelli also revealed that he had been working with airbrush artist Enrico Bertagnoli (aka Berta) to create more Spider-Man themed PS5 controllers too, apart from this Miles Morales controller.
This custom Miles Morales PS5 DualSense sports a striking red and black web design around the frame of the controller, with the game’s slogan “Be Yourself” plastered on the touchpad. The lighting around the touchpad was even changed to a more thematic red instead of the usual blue. The controller was made as a showcase piece, since it’s not actually a licensed Sony product (though it would be great if PlayStation took a few hints). Check out the images below:
Custom Miles Morales PS5 DualSense Controller SpinelliCustom Miles Morales PS5 DualSense Controller Spinelli
Custom Miles Morales PS5 DualSense Controller SpinelliCustom Miles Morales PS5 DualSense Controller Spinelli
Custom Miles Morales PS5 DualSense Controller SpinelliCustom Miles Morales PS5 DualSense Controller Spinelli
Custom Miles Morales PS5 DualSense Controller SpinelliCustom Miles Morales PS5 DualSense Controller Spinelli
Unfortunately, the controller is not for sale right now. Spinelli and LetsGoDigital aren’t entirely against the idea of mass producing them in bulk, though it comes with its own set of issues. Thanks to a combination of supply chain issues and having to painstakingly paint each controller manually, it will not exactly be cheap or speedily available. Alternatively, you can DM or email Berta on his social media channels if you’re interested in getting your hands on one. It’s not entirely guaranteed, though.
The few custom Miles Morales controllers that Spinelli and Berta did create are currently being preserved as memorabilia, with one of them residing in Bonami Gaming Console Museum in The Netherlands.

Source: Giuseppe Spinelli
Writer | Geek | Aspiring Novelist | Will probably ruin your kitchen | Legend has it Sam beat Dark Souls while skydiving (he didn’t)



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