Saturday, May 1, 2021

UK Government Officially Blocks NVIDIA Acquisition of ARM

Back in January this year, regulators based in the UK announced that it was investigating the takeover of its Cambridge-based semiconductor maker, ARM, by the US-based GPU maker, NVIDIA. As of today, that acquisition has officially been halted by the country’s Crown.

As of yesterday, the UK’s Secretary of State issued a public interest intervention notice (PIIN), citing that such an acquisition was grounds for national security concerns. Specifically, it brings up a Section 42 within the country’s Enterprise Act 2002; the act states that the government may suspend any acquisition of a UK-based facility if there is reasonable doubt that two or more enterprises will cease to be distinct; there is fear that the purchasing entity will bring the acquired enterprise under their ownership and therefore, erasing what makes them unique; and if the value of the company being acquired has a turnover value that exceeds £1 million (~RM5.76 million).

NVIDIA announced its plans to purchase ARM from the Softbank Group (SoftBank) back in September last year, agreeing to purchase the semiconductor maker for a handsome sum of US$40 billion (~RM 164 billion). In its decision to acquire the chipmaker, the GPU brand promised that it would not put a crimp into ARM’s open-licensing model and customer neutrality, of which it counts AMD, Apple, Samsung, and Google as some of its major clients.

Sadly, NVIDIA’s word wasn’t enough of a promise and like clockwork, several tech giants inevitably began expressing concern about the potential acquisition and while UK-based regulatory bodies began investigating the deal and the possible repercussion it could have on the semiconductor industry, as a whole.

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