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Nvidia’s-Arm takeover faces U.K. national security inquiry

Jensen Huang CEO, Nvidia

Rick Wilking | Reuters

LONDON — The U.K. government announced Tuesday that it wants a full-blown investigation into Nvidia’sTakeover by Arm of Cambridge chip designer Arm. This is widely considered to be the jewel in British tech’s crown.

Nadine Dorries, Digital and Culture Secretary ordered a “phase 2” probeInvestigation into Nvidia’s bid of $40 billion for Arm. The probe — to be carried out by the Competition and Markets Authority over the next 24 weeks — will investigate antitrust concerns and national security issues associated with the deal. According to the CMA, it was satisfied with its findings. serious concerns about the dealIt completed phase 1 of the first probe.

Regulators around the globe are monitoring the takeover and chip companies stated in August that they were evaluating the situation. deal is now unlikely to be completed before the initial deadline of March 2022.

An Nvidia spokesperson told CNBC on Tuesday: “We plan on addressing the CMA’s initial views on the impact of the transaction on competition, and we will continue to work with the UK government to resolve its concerns.”

The authors added that Phase 2 will allow them to show how the transaction will accelerate Arm’s growth and increase competition and innovation in all parts of the world, even the U.K.

Arm emerged from an Acorn Computers, an early computing firm in 1990. 95% worldwide smartphones use the company’s efficient chip architectures. 95% are made in China.

Company, bought by Japan’s SoftBank in 2016 for £24 billion ($32 billion), licenses its chip designs to more than 500 companies who use them to make their own chips.

Critics fear that Arm’s “neutral” chip designs will be unavailable to them and could cause a reduction in innovation and higher prices. Nvidia counters that Arm will gain more investment and innovation through the deal.

Jensen Huang CEO at Nvidia stated, “This combination offers tremendous benefits to both companies, customers and the industry,” when the agreement was announced in Sept. 2020.

The European Commission, an executive arm of EU, opened its own investigation into the agreement last month. It is currently being reviewed by U.S. regulators and China’s regulatory agencies.

“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 datacenters, automotive and in internet of things,” Margrethe Vestager, the European Commission’s executive vice president, said in a statement.

She said, “Our analysis suggests that Arm could be acquired by Nvidia. This would result in restricted or degraded Access to Arm’s Intellectual and distorting effects on many markets where semiconductors can be used.”

Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.