The UK will investigate Nvidia’s plan to buy Arm, a key provider of smartphone chip designs, citing national security.
On Monday, the UK’s Digital Secretary Oliver Dowden issued the notice, saying: “he is intervening in the sale on national security grounds.”
The action means the UK’s Competition and Markets Authority will prepare a report on the proposed acquisition’s impact on market competitiveness and national security. The report is due by July 30, and will be submitted to Dowden. He’ll then decide whether to pursue a more in-depth investigation, which could lead the secretary to clear, oppose or require changes to the acquisition, according to the global law firm Morgan Lewis.
The UK didn’t elaborate on its exact concerns with acquisition, but Dowden’s office noted: “In reaching this decision, he considered advice received from officials across the investment security community.”
It’s not hard to imagine the UK’s misgivings with Nvidia’s acquisition proposal. The Arm chip architecture is used across all modern smartphones. In addition, the chip architecture is gaining traction in servers and laptops, including in Apple’s M1-powered MacBooks, as an alternative to the x86 processors from Intel.
As a result, the acquisition is raising concerns it’ll give Nvidia too much control over a vital supplier in the IT technology industry. UK-based Arm is currently owned by Japan’s SoftBank. But last September, Nvidia announced its plan to buy Arm in a $40 billion deal.
In response to the UK’s upcoming probe, Nvidia said: “We do not believe that this transaction poses any material national security issues. We will continue to work closely with the British authorities, as we have done since the announcement of this deal.”
Last week, Nvidia CEO Jensen Huang said he expects to complete the acquisition some time in 2022. The company is already developing an ARM-based server chip that’s poised to target the supercomputer and data sciences market.
