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Nvidia's $40bn ARM acquisition could be foiled, UK Govt is looking into the matter

The logos of ARM and Nvidia on a grayish background

Back in July last year, there were rumors going around that Nvidia was considering purchasing Arm from Softbank, and later in September the same year, those rumors were finally confirmed when Nvidia itself announced that it was indeed looking to acquire Arm for $40 billion.

However, it seems the Government of UK, the country where Arm's based off isn't too happy about the proceedings taking place. Today, the Secretary of State for Digital, Culture, Media and Sport (UK) has issued a public interest intervention notice (PIIN) which officially confirms that it will be looking into the matter under the Enterprise Act 2002. The governing body has asked the Competition and Markets Authority (CMA) to investigate the proceedings in order to understand the long-term national consequences of such an acquisition and prepare a report by 30 July 2021.

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 Competition and Markets Authority (CMA) will prepare a report on the competition and national security aspects of the proposed transaction. The CMA has until midnight on 30 July 2021 to complete and submit this report to the Secretary of State.

A couple of days ago at a press interview (via VentureBeat), Nvidia CEO Jensen Huang had expressed his confidence about the acquisition stating that he felt the deal would be completed by 2022. Here's a part of his statement:

I’m very confident that the regulators will see the wisdom of the transaction. It will provide a surge of innovation. It will create new options for the marketplace. It will allow ARM to be expanded into markets that otherwise are difficult for them to reach themselves. Like many of the partnerships I announced, those are all things bringing AI to the ARM ecosystem, bringing Nvidia’s accelerated computing platform to the ARM ecosystem — it’s something only we and a bunch of computing companies working together can do. The regulators will see the wisdom of it, and our discussions with them are as expected and constructive. I’m confident that we’ll still get the deal done in 2022, which is when we expected it in the first place, about 18 months.

From the statement, it seems like Jensen Huang is expecting some sort of regulatory hurdle but remains confident that it will go in the company's favor and that the regulators will see the good side of such a deal. However, it could simply be an upbeat attitude he presented so as to not upset the company's investors. In fact, almost immediately after the PIIN was published, Nvidia's shares took a dive.

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