UK to investigate Nvidia's ARM deal on national security grounds

UK ministers are expected to order an in-depth investigation of Nvidia Corp's (NVDA.O) planned 30 billion pounds ($40 billion)acquisition of British chip designer ARM over antitrust and national security concerns, the Sunday Times reported.

Britain's Digital and Culture Secretary Nadine Dorries is expected to instruct the Competition & Markets Authority (CMA) to undertake a "phase two" probe of the deal next week, the report said.

The U.S. company agreed to buy ARM from Japan's Softbank in September 2020, triggering a backlash from politicians, rivals and customers.

ARM's technology is used by competing chipmakers, such as Qualcomm, Samsung Electronics and Apple, to produce their own processors.

Chipmakers worry that ARM will not retain its neutral player status under Nvidia's ownership.

Nvidia has said the fears are unfounded.

Nonetheless, Britain's CMA sounded an alarm over the deal in August, when it said the merged entity could reduce competition in markets around the world that rely on chip technology.

The government has been considering the CMA's findings, as well as assessing the possible national security implications of the deal.

A full in-depth inquiry would take around six months, after which the government could block the takeover, approve it or allow it to pass with certain undertakings.

The Department for Digital, Culture, Media and Sport declined to comment on the Sunday Times report.