Watchdog concerned about £29bn takeover of tech firm

A planned £29bn acquisition of chip designer Arm by US firm Nvidia raises “serious” competition concerns, according to the UK’s competition watchdog.

The Competition and Markets Authority (CMA) said it was worried the deal would stifle innovation in several areas, such as gaming and self-driving cars. It says a more in-depth investigation into the takeover is required.

Nvidia has responded that the deal would benefit Arm, licensees and competition in the UK.

“We look forward to the opportunity to address the CMA’s initial views and resolve any concerns the government may have,” a spokesman for the US tech company told the BBC.

Japan’s Softbank, which currently owns Arm, agreed to sell it to Nvidia in September last year. Arm’s global HQ is in Cambridge but the company also has bases in Sheffield, Manchester and Warwick.

Arm’s intellectual property (IP) is used by some of Nvidia’s rivals to produce semiconductor chips. The CMA has suggested that if Nvidia acquired Arm it could restrict access to that IP for its rivals.

Nvidia, which is the world’s largest graphic and AI chip maker, has offered remedies to get the deal approved, but the CMA says these would not be enough to allay its concerns.

The planned takeover will now likely be subject to a “phase 2” investigation.