The UK government is considering blocking chip designer Nvidia Corp's $40 billion acquisition of British peer Arm Ltd on potential national security risks, Bloomberg News reported on Tuesday, citing people familiar with the matter.
Nvidia said that it is working through the regulatory process with the UK government.
"We look forward to their questions and expect to resolve any issues they may have," an Nvidia spokesperson told Reuters.
Arm, currently owned by Japan's SoftBank Group Corp is a major player in global semiconductors, a sector fundamental to technologies from artificial intelligence and quantum computing to 5G telecoms networks. Its designs power nearly every smartphone and millions of other devices.
The UK's Competition and Markets Authority (CMA) had sent its completed Phase 1 investigation report to the UK government on July 20,according to the government's website.
The assessment submitted contains worrying implications for UK's national security, the Bloomberg report said, citing a person familiar with the matter.
The regulator declined further comment on Tuesday.
The U.K. government is likely to conduct a deeper review of the merger due to national security issues, the report added.
In April, the UK government said it is invoking national security to investigate the deal and that CMA will assess the competition, jurisdiction and national security impact of the deal.
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