Ministers preparing to intervene in Nvidia’s £30bn swoop on Arm in move that could scupper controversial deal
- Culture Secretary will order an in-depth investigation into the deal
- The Competition and Markets Authority will carry out the probe
- Cambridge-based Arm has been owned by Japan’s Softbank since 2016
Ministers are preparing to intervene in Nvidia’s £30billion swoop on Arm in a move that could scupper the controversial deal.
Culture Secretary Nadine Dorries will this week order an in-depth investigation into the deal on national security and competition grounds.
The Competition and Markets Authority will carry out the probe. The move will be a huge blow to US chipmaker Nvidia, which agreed the takeover last September.
Probe: Nadine Dorries will order an in-depth investigation into the deal on national security and competition grounds
It comes as a global microchip shortage is sending shockwaves throughout the manufacturing sector and slowing down production lines.
And it is the latest in a string of Government interventions in deals that target strategically important companies with cutting-edge technology.
Cambridge-based Arm has been owned by Japan’s Softbank, which is seen as politically neutral, since 2016.
Arm’s customers include Apple, which has used Arm chips in its iPhones. Its technology is used in devices such as laptops, smart TVs and cars connected to the internet.
EU and Chinese officials have also raised concerns about the potential damage the Nvidia tie-up could do to rival companies.
The Competition and Markets Authority (CMA) called for a full investigation into the deal in August over concerns it could stifle innovation, lead to less competition and drive up prices.
The CMA has said Nvidia would have the ‘ability and incentive’ to harm rivals by throttling their access to Arm’s technology if the takeover is given the green light.
Nvidia has offered a concession that it would not cut off access for licensees to its chip designs – though many are still sceptical that this would go far enough.
Dorries will have to accept the CMA’s decision on whether the deal could harm rivals – though she will have the final say on national security.
The intervention, which was reported by the Sunday Times, comes weeks before the new National Security and Investment Act is due to come into force, which will give ministers a much wider remit to wade into potentially harmful deals.