Nvidia’s $40 billion takeover of chip designer Arm faces a UK national security probe

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  • Digital and Culture Secretary Nadine Dorries on Tuesday ordered a “Phase 2” investigation into Nvidia’s $40 billion bid for Arm.
  • The investigation – to be carried out by the Competition and Markets Authority – will investigate antitrust concerns and national security issues associated with the deal.
  • Arm was spun off from an early computing company called Acorn Computers in 1990.
  • The company’s energy-efficient chip architecture is used in 95% of the world’s smartphones and 95% of its chips designed in China.

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LONDON – The UK government announced on Tuesday that it wants a full investigation into Nvidia’s acquisition of the Cambridge chip designer arm, widely seen as the jewel in the British tech sector’s crown.

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Digital and Culture Secretary Nadine Dorries “Phase 2” investigation ordered In Nvidia’s $40 billion bid for Arm. An investigation by the Competition and Markets Authority over the next 24 weeks will look into antitrust concerns and national security issues related to the deal. The CMA said it had serious concerns about the deal after completing a preliminary “Phase 1” investigation.

The acquisition is being investigated by regulators around the world and chip companies said in August that The deal is now unlikely to be completed before the initial deadline of March 2022.

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

He added: “The Phase 2 process will enable us to demonstrate that the transaction will help accelerate branching and foster competition and innovation, including in the UK.”

Arm was spun off from an early computing company called Acorn Computers in 1990. The company’s energy-efficient chip architecture is used in 95% of the world’s smartphones and 95% of its chips designed in China.

company, Bought by Japan’s SoftBankco For £24 billion ($32 billion) in 2016, licenses its chip designs to over 500 companies that use them to make their own chips.

Critics worry that the merger could restrict access to Arm’s “neutral” chip designs and that it could lead to higher prices, fewer options and less innovation in the semiconductor industry. But Nvidia argues that the deal will lead to more innovation and that branch will benefit from the increased investment.

“This combination has tremendous benefits for both companies, our customers and the industry,” said Nvidia CEO Jensen Huang in September 2020 when the deal was announced.

Last month, the European Commission, the EU’s executive arm, launched its own in-depth investigation into the deal, which is also being investigated by regulators in the US and China.

“While Arm and Nvidia do not compete directly, Arm’s IP is an important input into products competing with Nvidia, for example in datacenters, automotive and the Internet of Things,” said European Commission Executive Vice President Margrethe Vestager. Statement.

“Our analysis suggests that Arm’s acquisition by Nvidia may limit or degrade access to Arm’s IP, with distorting implications in many markets where semiconductors are used,” she said.

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