Nvidia’s $ 40 billion ARM deal faces UK national security checks

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The UK government will consider the national security implications of the acquisition of the US chip group Nvidia by British chip designer ARM Holdings, raising a question mark for the $ 40 billion deal (approximately 2.99 130 kroner).

Digital Minister Oliver Dowden says he has issued a so-called intervention notice on the sale of HAND from Japan SoftBank to Nvidia.

“As a next step and to help me gather relevant information, the UK’s independent competition authority will now draw up a report on the consequences of the deal, which will help inform further decisions,” he said.

Nvidia has said it does not believe the deal poses significant national security concerns.

“We will continue to work closely with the British authorities, as we have done since the announcement of this deal,” said Nvidia, the largest US chip company with a market capitalization.

Defensive equipment

ARM is a major player in global semiconductors, a sector essential for artificial intelligence and quantum computing technologies up to 5G telecommunications networks. Its design powers almost every smartphone and millions of other devices.

Semiconductors are also at the heart of critical infrastructure in Britain and deal with defense-related technologies and national security issues, the government said, adding that security officials have informed the decision to intervene.

The Competition and Markets Authority (CMA) will assess competition, jurisdiction and the impact of the deal on national security with a report due by July 30th, the government said.

Dowden will then decide whether to clear the deal, with or without commitments from the participating companies, or direct it to a longer and more in-depth investigation.

The CMA has been reviewing the deal since January, focusing on whether ARM can raise prices or reduce customer service that competes with Nvidia.

Nvidia announced the deal in September and is committed to maintaining ARM’s neutrality and offering guarantees to keep its headquarters and staff at Cambridge.

Corporate concern

Similar commitments by SoftBank in 2016 convinced the UK to allow the takeover of the country’s leading technology company.

However, the deal with Nvidia puts a vital supplier of multiple silicone chip makers under the control of a single player.

In addition to boosting regulatory scrutiny, the deal is a concern among global technology companies, including Google,, Qualcomm, and Microsoft at a time when many industries are affected by the global shortage of chips.

ARM, which was founded and is still based in the English university city of Cambridge, does not produce chips, but has created an architecture with a set of instructions on which it bases computing kernel projects.

Its chip design and technology are licensed to customers such as Qualcomm, Apple, and Samsung Electronics.

© Thomson Reuters 2021

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