Latest news updates: Nvidia stands by Arm acquisition in face of UK security probe

Nvidia said on Wednesday that it still believed its proposed acquisition of Arm would benefit the British chip design company’s customers and the industry at large, just a day after the UK launched a national security investigation into the deal.

The US chipmaker’s remarks came ahead of a call with Wall Street analysts late on Wednesday to discuss its quarterly earnings.

The latest numbers showed that Nvidia’s gaming and data centre chip businesses were continuing to fire on all cylinders, lifting its revenues by 50 per cent in the third quarter and prompting a 4 per cent after-market bounce in its shares.

Nvidia’s shares have surged by about 130 per cent in the 14 months since the proposed Arm deal was announced, lifting its stock market value to more than $730bn.

The advance has come on the back of strong demand for gaming and cloud computing services during the pandemic, with third quarter revenues hitting $7.1bn, or $270m ahead of Wall Street’s expectations.

Nvidia also forecast that fourth quarter revenue of $7.4bn, or $540m above expectations, as it managed to brush off the worst of the chip supply chain pressures that have hit other parts of the sector.

The latest UK investigation, along with concerns that Nvidia said had been raised by the Federal Trade Commission in the US, have undermined the company’s hopes of completing an Arm acquisition by next March.

The company said a formal antitrust process hadn’t yet started in China, even though the acquisition was unveiled 14 months ago, although it said the deal had been “under review” by authorities there. 

Nvidia’s after tax earnings climbed 84 per cent in the latest period to $2.46bn, or 97 cents a share. On the pro-forma basis Wall Street assesses the company, earnings per share climbed to $1.17, 6 cents above expectations.