Last year, Nvidia made the announcement that they will be acquiring ARM Limited for a whopping $40 billion, the company’s biggest acquisition to date. That deal has come under a lot of scrutiny, and despite Nvidia’s own confidence the deal will be settled by 2022, it has yet to be approved by any official governing bodies. Now the deal is apparently being investigated by the UK government for national security reasons.
The UK’s Department for Digital, Culture, Media & Sport, has posted a public interest intervention notice on the UK Government site detailing the potential risks to national security and urging the UK government to look into the deal more thoroughly.
“Under the powers set out in the Enterprise Act 2002, the Secretary of State for Digital, Culture, Media and Sport is able to intervene on national security grounds. This responsibility is discharged in a quasi-judicial capacity,” the notice says.
“On 19 April 2021, the Secretary of State issued a public interest intervention notice (PIIN), confirming that he is intervening in the sale on national security grounds. In reaching this decision, he considered advice received from officials across the investment security community.”
The notice then concludes that the Competition and Markets Authority (CMA) will investigate the deal and release a report by July 30th 2021, outlining advice to give to the Secretary of State regarding the acquisition.
This is not the first time Nvidia’s ARM acquisition has come under scrutiny though, as many companies have been vocal about their views on the deal. As rumors of the acquisition started going round, companies like TSMC and Foxconn were reportedly in talks to bid for ARM as well, in a plan first started by Samsung to create a consortium of companies so Nvidia wouldn’t have total control.
They are valid points, since ARM’s chip designs are used in almost every mobile phone and countless chips too. The UK-based company does not manufacture any chips themselves, but designs chips instead to sell to other tech companies. Nvidia buying ARM could hurt competition, as many opposers say, but Nvidia has claimed they will keep ARM’s open licensing model as well as customer neutrality.
“Acquiring ARM is a very similar approach to the way we think about all of computing,” said Nvidia CEO Jensen Huang. “It’s an open platform. We sell our chips. We license our software. We put everything out there for the ecosystem to be able to build bespoke, their own versions of it, differentiated versions of it. We love the open platform approach.”
The deal is expected to be finalized in 2022, with Nvidia, ARM, and ARM’s current owner Softbank all confident that the acquisition will be finalized by then. But an investigation by the UK government will surely put some strain on the deal, and that’s before any regulatory bodies from the US, EU, and China have approved the acquisition.
What do you think? Is Nvidia’s purchase of ARM a national security risk? Do you think the deal will eventually be finalized? Or will the intervention succeed and how would that affect the acquisition? Let us know!