Digital secretary orders in-depth investigation into Nvidia's planned $40bn takeover of Arm

The UK Competition and Markets Authority's phase one report found that the deal raised 'significant competition concerns'

An in-depth investigation has been launched into Nvidia's proposed $40bn takeover of UK chip designer Arm based on competition and security grounds.

The UK's Competition and Markets Authority (CMA) has already conducted a phase one inquiry which found that the takeover raises "significant competition concerns" and that an in-depth investigation into the deal was warranted.

Nadine Dorries - the Secretary of State for the Department for Digital, Culture, Media and Sport (DCMS) - has now ordered an "in-depth" phase two inquiry.

Announcing her decision, Dorries said: "Arm has a unique place in the global technology supply chain and we must make sure the implications of this transaction are fully considered.

"The CMA will now report to me on competition and national security grounds and provide advice on the next steps."

US giant Nvidia agreed to buy the Cambridge-based firm from Softbank last September but concerns were raised by the CMA that the merged business "would have the ability and incentive to harm the competitiveness of NVIDIA's rivals by restricting access to Arm's intellectual property".

Arm's designs are widely used across the tech industry, with its customers including Apple, Google and Samsung.

"We will continue to work with the UK government to resolve its concerns," Nvidia said in a statement.

"The phase two process will enable us to demonstrate that the transaction will help to accelerate Arm and boost competition and innovation, including in the UK."