A $40bn (£29bn) takeover of UK chip designer Arm by US giant Nvidia will be subject to an in-depth inquiry by the UK’s competition watchdog.
Nadine Dorries (Digital Secretary) told the Competition and Markets Authority, CMA, to initiate a phase 2 investigation because of security and market concerns.
CMA’s initial inquiry found “significant competition concerns”.
Nvidia claimed, however, the merger would improve competition and encourage innovation.
According to the company, they stated in a statement that “we will continue to collaborate with UK governments to solve its problems.”
Nvidia stated that “the phase 2 process will allow us to show that the transaction will accelerate Arm” and increase competition and innovation in the UK.
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Arm-designed chips are found in many applications.
Announcement of her decision by Ms Dorries: “Arm holds a unique position in the global supply chain for technology and we need to ensure that the implications are fully considered.”
“The CMA is now going to report back to me about competition and national security and offer advice regarding the next steps.”
Officials provided additional details on national security concerns in a separate letter addressed to Arm and Nvidia.
According to the report, the agreement could lead to “potentially reduced autonomy by the UK in developing, operating or supporting defence and security system that utilise Arm IP (“intellectual property”)”.
A European Commission competition investigation will be done on the deal.
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