NVIDIA, Arm Tell UK Competition Watchdog Why It Should Approve Their Deal

Silicon Valley chip maker NVIDIA and United Kingdom chip designer Arm are fighting back as a U.K. competition regulator considers blocking NVIDIA’s proposed $40 billion deal to buy Arm from tech conglomerate SoftBank.

In response to the U.K.’s Competition and Markets Authority (CMA), the companies outlined why the deal should be approved in a 28-page document.

“Deal opponents romanticize Arm’s past and either ignore or disparage Arm’s most powerful competition,” the companies wrote. “But if Arm had market power, it would have sizable revenue growth and would be enormously profitable.”

The decision to deny the transaction would not promote competition, rather it would prevent Arm from bringing competition into areas that have been long dominated by x86, the companies said, referring to any 32-bit processor compatible with the x86 instruction set.

Last week, the CMA said in a press release that it will examine the deal’s possible impact on competition in the U.K. The CMA is likely to consider whether, following the takeover, Arm has an incentive to withdraw, raise prices or reduce the quality of its IP licensing services to NVIDIA’s rivals.

“We will work closely with other competition authorities around the world to carefully consider the impact of the deal and ensure that it doesn’t ultimately result in consumers facing more expensive or lower quality products,” said CMA Chief Executive Andrea Coscelli in the release.

In August, NVIDIA’s planned acquisition of Arm was flagged by the CMA amid concerns that the acquisition would stifle competition.

Read more: UK CMA Flags Competition Concerns Over Chip-Maker NVIDIA’s Acquisition of Arm

“The chip technology industry is worth billions and is vital to products that businesses and consumers rely on every day,” Coscelli said at the time. “This includes the critical data processing and data center technology that supports digital businesses across the economy, and the future development of artificial intelligence technologies.”