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UK gov orders in-depth probe into Nvidia-ARM takeover

The government has ordered the CMA to carry out a "phase two" investigation on grounds of antitrust and national security

The UK government has announced that Nvidia’s $40 billion (£30 billion) acquisition of ARM will be further scrutinised as part of a "phase two” investigation carried out by the Competitions and Market Authority (CMA).

The watchdog has been given 24 weeks to conduct the inquiry before delivering a final report to digital and culture secretary Nadine Dorries, with the possibility of extending the deadline by up to eight weeks.

During this time, the CMA will consider evidence whether the acquisition of the Cambridge-based semiconductor company by the US chip giant is a threat to competition and national security.

The first phase of the CMA's investigation, which concluded in August and covered competition and jurisdictional issues, determined that the deal could lessen competition across four markets: data centres, Internet of Things, automotive, and gaming.

Today's announcement confirms previous reports published by The Sunday Times over the weekend.

15/11/2021: The UK government is expected to order an in-depth investigation into Nvidia’s $40 billion (£30 billion) acquisition of ARM on grounds of antitrust and national security.

That's according to The Sunday Times, which reported that the newly appointed digital and culture secretary Nadine Dorries will order the Competitions and Market Authority (CMA) to carry out a “phase two” investigation into the acquisition of the Cambridge-based semiconductor company by the US chip giant.

The order is likely to be made this week, the publication claimed, and will see the CMA further scrutinise the potential effects of Softbank’s sale of ARM to Nvidia, which was first announced in September 2020.

Nvidia told IT Pro that it "will continue to work with the UK government to resolve its concerns". 

"A Phase Two process would enable us to demonstrate in detail how the transaction will help accelerate ARM and boost competition and innovation, including in the UK," the company's spokesperson said.

In August, following the first phase of its investigation, the CMA found that the acquisition “raises serious competition concerns” that Nvidia’s would prevent its rival chipmakers, including Intel, AMD, Qualcomm, Samsung and Apple, from accessing ARM’s key technologies, “ultimately stifling innovation across a number of important and growing markets”.

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“This could end up with consumers missing out on new products, or prices going up,” the watchdog’s chief executive Andrea Coscelli said at the time.

“The chip technology industry is worth billions and is vital to products that businesses and consumers rely on every day. This includes the critical data processing and data centre technology that supports digital businesses across the economy, and the future development of artificial intelligence technologies that will be important to growth industries like robotics and self-driving cars,” he added.

A full investigation into the deal is expected to take around six months. If it is found that the acquisition does, in fact, impact national security, the UK government will have the opportunity to prevent the takeover, or allow it to take place under certain conditions. 

On 27 October, the European Commission also launched an “in-depth investigation” into the deal, following reports from earlier this year that the acquisition warrants "serious scrutiny", according to officials and advisors in Brussels. The deal is also reportedly being closely observed by US and Chinese authorities.

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