LONDON—The U.K. government said it would probe Nvidia Corp. ’s $40 billion deal to buy British chip-designer Arm from SoftBank Group Corp. , over possible national security issues, adding new regulatory scrutiny to the proposed deal.
The deal—combining two of the world’s biggest chip designers—could redraw the chip industry. But the proposed combination has attracted intense scrutiny from regulators around the world, and accusations from Nvidia competitors that it could hand the U.S. company an unfair advantage in an intensifying global race for chip know-how and manufacturing capacity.
Arm, based in Cambridge, England, has long based its business model on partnering with as many companies as possible in providing its chip designs. That philosophy led to those designs being incorporated in more than 95% of the world’s smartphones.
British Digital Secretary Oliver Dowden on Monday asked the country’s antitrust agency to investigate the merger’s national-security implications and deliver a report by July 30. The digital secretary can clear the deal with or without conditions, or nix it.
The national-security review comes on top of the agency’s previously announced plans to probe the deal on antitrust grounds.