UK Government Orders Phase Two Review into Nvidia-Arm Deal
The UK government has ordered a phase two investigation into Nvidia’s proposed acquisition of chip designer Arm, citing competition and national security concerns.
The move follows the end of a phase one review into the £40m deal by the Competitions and Markets Authority (CMA) in August, which raised significant competition concerns but did not refer to national security. The report, published in full today, cited “detailed and reasoned submissions from customers and competitors raising concerns” across the globe. This related to the potential of a “substantial lessening of competition across four key markets” – data centers, internet of things, the automotive sector and gaming applications.
Digital Secretary Nadine Dorries has now written to the CMA instructing them to conduct an in-depth phase two investigation into the deal. In addition to competition considerations, Dorries said national security continues to be a relevant consideration and should be investigated further.
Under the Enterprise Act 2002, the UK government has the power to intervene in certain mergers on public interest grounds. The issue in the Nvidia-Arms deal relates to the design and production of semiconductors, which is increasingly seen as strategically critical to countries’ national and financial security.