UK launches further probe into $40bn Nvidia-Arm deal

The UK has announced it will be launching a Phase 2 investigation into Nvidia's $40 billion (€35.3 billion) takeover of Arm Holdings over alleged national security concerns.

Digital Secretary Nadine Dorries has ordered the probe on public interest grounds, hoping to look into any antitrust or competition violations underpinned by the merger.

It was originally reported in April that the government were looking into the national security implications of the acquisition, which became a hot topic following Nvidia purchasing the company in September 2020, despite the tech giant insisting the company's neutrality will remain "intact" and its headquarters would remain stationed in Cambridge.

Read more: UK to investigate national security implications of Nvidia's ARM deal

A summary of the findings in the Phase 1 report was published in August.

According to the Competition and Markets Authority (CMA), the Nvidia-Arm deal presents "significant competition concerns". It will have 24 weeks to conduct this assessment - potentially subject to up to an eight-week extension - before the digital minister will have to decide what, if any, sanctions will be placed on the deal.

"Arm has a unique place in the global technology supply chain and we must make sure the implications of this transaction are fully considered", Dorries said in a statement. "The CMA will now report to me on competition and national security grounds and provide advice on the next steps."

"The government’s commitment to our thriving tech sector is unwavering and we welcome foreign investment, but it is right that we fully consider the implications of this transaction", she added.

Arm, which currently manufacturers semiconductors that are used by several large smartphone developers, is vital to the UK's tech sector, and the government may intervene in the interests of national security.

Nvidia is hoping to break into the chip market in a bid to help negate the effects of the ongoing semiconductor shortage, which has affected manufacturing in both the tech and automotive industries.

The firm revealed it would "continue to work with the UK government to resolve its concerns", suggesting the deal could “help to accelerate Arm and boost competition and innovation, including in the UK".

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The deal also faces competition in the EU, which has also launched a probe into the acquisition. Digital Commissioner Margrethe Vestager relayed the deal "could lead to restricted or degraded access to Arm’s IP" when she ordered the investigation in October.

The deadline for the EU's investigation is March 15, 2022.

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