The Nvidia Arm Merger to be Blocked by the UK Government?

The 40 Billion Dollar Nvidia Arm deal might be in trouble after the UK government raised some concerns over national security.

From its first announcement in September 2020, the Nvidia Arm deal has seen many detractors to the cause. From Qualcomm to the UK Competitions and Market Authority, various organisations have either objected or complained about this detail. Qualcomm even went to the American FTC, the European Commission, and China’s State Administration regarding the 40 Billion Dollar deal.

Nvidia Arm

That seemed to have worked because the culture secretary of the UK, Oliver Dowden, stepped in to intervene in the deal between Nvidia, a US-based company, and Arm, whose principal office resides in Cambridge, UK. Before Nvidia, Arm was owned by Japan-based SoftBank. Arm designs chips used by Apple and other smartphone companies.

Following careful consideration of the proposed takeover of Arm, I have today issued an intervention notice on national security grounds,” Mr Dowden said. Dowden then told the Independent Competition Authority to prepare a report on the deal by the 31st of July. The UK government was mainly concerned about the security risks a deal of such magnitude carries, and also “whether the takeover could lead to a substantial lessening of competition in any market in the UK”.

Oliver Dowden
Oliver Dowden, Secretary of State for Digital, Culture, Media and Sport of the UK.

According to Bloomberg, “The assessment, delivered in late July, contains worrying implications for national security and the U.K. is currently inclined to reject the takeover.”

If the UK government indeed blocks the Nvidia Arm deal, Nvidia intends to turn Arm into an independent IPO and invest upwards of 2 Billion Dollars into it. It remains to be seen if any other government or authority intervened in the deal or if the deal is allowed to go through everywhere with a few conditions safely. Chip and Semiconductor technology has become an essential part of global relations over the past year, this Nvidia Arm deal being a part of it.

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