UK will investigate NVIDIA's purchase of ARM over security concerns (updated)

Officials may not have been satisfied with their first probe.

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SANTA CLARA, CA - MAY 10:  A sign is posted in front of the Nvidia headquarters on May 10, 2018 in Santa Clara, California. Nvidia Corporation will report first quarter earnings today after the closing bell.  (Photo by Justin Sullivan/Getty Images)
SANTA CLARA, CA - MAY 10: A sign is posted in front of the Nvidia headquarters on May 10, 2018 in Santa Clara, California. Nvidia Corporation will report first quarter earnings today after the closing bell. (Photo by Justin Sullivan/Getty Images) Justin Sullivan via Getty Images

The UK government apparently isn't satisfied with its initial probe of NVIDIA's ARM purchase. As Reuters reports, The Sunday Times has heard Digital and Culture Secretary Nadine Dorries will order the country's Competition & Markets Authority to conduct a "phase two" investigation of NVIDIA's deal over national security issues. The announcement could come as soon as next week, The Times said.

A second investigation would reportedly last about six months. After that, officials could either block the deal, approve it as-is or require concessions.

The country's Department for Digital, Culture, Media and Sport declined to comment on the story. We've asked NVIDIA for comment. The tech firm has focused its energy so far on downplaying concerns about ARM's neutrality if the deal closes, promising an open licensing model that treats customers fairly.

Any second investigation wouldn't necessarily spell doom for NVIDIA's acquisition. It would suggest the government has some qualms, however, and that NVIDIA might have to make some sacrifices. At the least, the company would have to be patient — it wouldn't get UK approval until 2022 at the earliest, and it would still have to wait for other regulators before finalizing the merger.

Update 11/14 5:30PM ET: An NVIDIA spokesperson told Engadget the company would "continue to work" with the UK government to address concerns, and said a possible second phase would let the GPU maker "demonstrate in detail" how the deal would both improve ARM and foster competition.

Update 11/15 9:20AM ET: The Competition and Markets Authority has officially launched a phase two investigation focusing on both competition and national security.

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