U.K. Opens National Security Probe Of Nvidia’s Takeover Of Chip Designer Arm

The British government has opened a six-month probe into Nvidia’s takeover of the Cambridge, England-based chip designer Arm on national security grounds.

The $40 billion deal to buy the semiconductor businesses that helps power smartphones, tablets and countless other devices from SoftBank was announced in September 2020 but now faces a gauntlet of antitrust reviews to be approved.

The U.K.’s Department for Digital, Culture, Media and Sport announced on Tuesday that it would push for the British antitrust regulator, the Competition and Markets Authority (CMA), to run a six-month in-depth review of the deal on competition and national security grounds.

The deal had already been flagged by the CMA in January over fears that Nvidia’s takeover would lead to its rival losing access to Arm’s innovative chips that power Apple, Samsung and Sony devices, while the U.S., China and the European Union have also opened competition probes.

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

The deal has been opposed by Google, Microsoft and chipmaker Qualcomm, who argued that takeover would threaten Arm’s position as the “Switzerland of the chips’ licensing to powerful and energy-saving technology to virtually all the world’s major chipmakers and smartphone producers, according to Bloomberg.

The new delay will be a blow to Nvidia CEO Jensen Huang and SoftBank, which bought Arm for $32 billion in 2016. Nvidia was once famous for its video games’ graphic chips, but its focus on powering data centers has helped catapult the business to a $757 billion market cap, with its shares up more than 500% since the Arm deal was announced in September 2020.

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Source: U.K. Opens National Security Probe Of Nvidia’s Takeover Of Chip Designer Arm

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