UK may block Nvidia ARM acquisition due to national security concerns

Nvidia is set to acquire ARM from SoftBank for $40 billion, but UK regulators feel the deal may be anti-competitive and raises national security concerns.

Nvidia is the United States' biggest chip company by market capitalization and could become a competitive threat once it gains access to ARM's large patent portfolio. ARM is also based in Cambridge, so the UK feels a change in ownership to an American-based company may present national security concerns.

"We continue to work through the regulatory process with the UK government," said an Nvidia spokesperson in a statement. "We look forward to their questions and expect to resolve any issues they may have."

According to Bloomberg, if the sale of ARM is blocked, then SoftBank will seek an IPO of an independent ARM. Investors are committed to making the IPO work, and Nvidia is set to invest $2 billion whether the sale is completed or not.

ARM CEO Simon Segars said, "The combination of Arm and NVIDIA is a better outcome than an IPO."

Even if the UK approves of the merger, Nvidia must overcome regulators in the European Union, United States, and China. The increase in competition against Intel and Qualcomm may make regulators shrink at the idea of a merger during the current market conditions.

26 Comments

lkrupp 10521 comments · 19 Years

About 3 years ago

Okay, let’s make sure we remember, if Nvidia does acquire ARM there is no possible way Nvidia could use ARM against Apple, period. Apple was one of the founding fathers of ARM and holds a permanent architecture license since the release of the iPhone.

https://en.wikipedia.org/wiki/Arm_Ltd.

GeorgeBMac 11421 comments · 8 Years

The chances of this merger taking place have passed the zero mark and are into negative territory -- there are just too many hurdles from every corner of the globe in its path -- and not enough incentive to ignore them or override them.

But the fact that the UK does not trust the U.S. is both hilarious and telling.

... The U.S. must address that concern -- not with respect to this failing merger, but from its underlying basis.

Trust is the foundation that both companies and countries rely on. When that fails everything begins to fail.

CuJoYYC 86 comments · 8 Years

"… the UK feels a change in ownership to an American-based company may present national security concerns."

I love it, especially in light of the 2020 US imposition of tariffs on Canadian aluminium citing "national security concerns." Because everyone knows that Canadian aluminum used to make beer cans and screen doors in the middle of a pandemic is a "yuge" national security threat.

Anyway, karma is a bitch.

crowley 10431 comments · 15 Years

I used to have shares in ARM way back before Softbank. And I have fond memories of the BBC Micro and Acorn Archimedes I had in my school. It would be nice to buy back into a homegrown treasure.

robaba 228 comments · 4 Years

Good. It’s not that I think NVidia plans to screw over Apple wrt it’s ARM Architectural license, but I just don’t like NVidia. The problem ARM has is how to make enough from licensing designs to cover the huge and growing cost of R&D? Thing is, they really need to move on to the whole widget in order to capitalize on their business model. CPUs aren’t discreet parts any longer—the SoC is king.