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| Britain could block Nvidia's takeover of Arm |
Given the potential national security risks, the UK is considering blocking an Nvidia acquisition of Arm.
Nvidia, the largest US chip maker by market value, announced in September that it would buy Arm from Japan's SoftBank for $40 billion to expand its influence in the emerging market.
SoftBank sells assets to raise funds for new purchases and investments in startup companies.
In April, the UK's culture minister asked the Competition and Markets Authority (CMA) to prepare a report on whether the deal could be considered anti-competitive, as well as a summary of national security concerns raised by third parties.
The assessment was conducted in late July and has had worrying implications for national security. Great Britain is currently opposed to takeovers. Because of national security concerns, the UK can take a closer look at the merger process.
The final decision has yet to be made and the UK can still accept the transaction with certain conditions.
Britain's culture minister has been appointed to decide whether the merger needs further study by the UK Competition Authority.
An Nvidia spokesperson said in a statement: "We will continue to work with the UK government to complete the regulatory process. We look forward to your concerns and hope to resolve any issues you encounter."
Nvidia wants to buy Arm
Arm has the most widely used standards and designs in the $400 billion chip industry. Its technology is at the heart of most smartphones around the world and plays an increasingly important role in computing. Including servers running on corporate and government systems.
The Cambridge-based company acts as a neutral party, selling chip solutions to several major technology companies and licensing their standards.
The ownership of SoftBank, which was acquired by Japan in 2016, has not bothered Arm customers and has maintained that neutrality.
It is not clear how changing the Japanese MRA to the United States will affect the national security of the United Kingdom. But since SoftBank's acquisition of the technology, semiconductor technology has moved into the focus of policy attention.
The chip industry has become an integral part of former President Donald Trump's trade war with China. The US has taken steps to restrict the country's access to proprietary technology, which is mostly owned by US companies that dominate the industry.
Some of Arm's inventions have restrictions imposed by the US government on selling chip technology to China because the company operates in China.
Main assets
British Prime Minister Boris Johnson has taken measures to protect critical national infrastructure. Arm is at the heart of the chip industry, which means this deal has people worried. In fact, Nvidia is in direct competition with arms customers such as Qualcomm, Intel, and AMD.
Some of Nvidia's competitors have said they are willing to invest in Arm to help with its independent development if US companies are not allowed to buy.
The deal also requires regulatory approvals from China, the European Union and the United States. The American company has promised that in the event of its acquisition, it will preserve Arm's independence and invest heavily to expand its influence.
Any acquisition may have certain conditions, such as retaining about 3,000 British employees and maintaining the company's headquarters in Cambridge.
The Nvidia CEO said he still believes regulators will approve the company's acquisition of Arm.
Since SoftBank acquired Arm for $32 billion in 2016, its founder Masayoshi has used Son Arm as a cornerstone of his strategy to invest in AI startups.
If the transaction is blocked by regulators, SoftBank can apply to ARM for it to be made public. As the CEO of ARM said in July, the Arm and Nvidia merger is a better outcome than the IPO.