Nvidia's $40bn takeover of Arm could be blocked by UK government over national security concerns

Bloomberg reports that national security concerns have been raised over the deal for chip designer

The UK could block Nvidia's proposed takeover of chip designer Arm over national security concerns, according to a report from Bloomberg.

Nvidia announced its intention to acquire Cambridge-based Arm from Japan's SoftBank Group in a $40bn deal last September.

But, in April, culture secretary Oliver Dowden asked the Competition and Markets Authority (CMA) to prepare a report on whether the deal could be seen as anti-competitive and if there were any national security concerns.

And according to Bloomberg, a source familiar with the discussions said the UK is considering rejecting the takeover after the report contained concerns over national security, though no final decision has been taken.

An Nvidia spokesperson told the news outlet: "We continue to work through the regulatory process with the UK government.

"We look forward to their questions and expect to resolve any issues they may have."

Arm's chip designs are widely used in smartphones, computers and other machinery and by various companies across the world, with Nvidia reportedly looking to use the acquisition to spread its reach in the semiconductor market.

Bloomberg reports that the deal has raised concerns because Nvidia directly competes with Arm's customers like Qualcomm and Intel.

Any takeover deal is likely to attach conditions such as maintaining Arm's 3,000 UK staff and keeping the company's headquarters in Cambridge, while Nvidia has also pledged to maintain Arm's independence if the takeover is complete, Bloomberg says.