FTC files a lawsuit against Nvidia in order to prevent the $40 billion acquisition of ARM
Since Nvidia announced its acquisition of ARM, the deal has faced numerous roadblocks, and it has now hit yet another major stumbling block. The Federal Trade Commission (FTC) has filed a lawsuit to prevent the merger from taking place.
The Federal Communications Commission is concerned that the combined entity will "suffocate competing next-generation technologies." After receiving complaints from Google, Microsoft, and Qualcomm, the FTC launched an investigation into the deal.
"The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from suffocating the innovation pipeline for next-generation technologies," said FTC Bureau of Competition Director Holly Vedova in a statement. This proposed merger would distort Arm's incentives in the chip market, allowing the combined company to unfairly undercut Nvidia's competitors."
"As we move into this next step in the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition," an Nvidia spokesperson said in response to the news.
Nvidia already uses Arm-based products in several areas, according to the FTC, including high-level advanced driver systems for vehicles, cloud computing CPUs, and DPU SmartNICs. Nvidia would gain an unfair advantage in those markets if it bought Arm.
It has also raised concerns that Nvidia will gain access to sensitive information from Arm licensees who already compete with Nvidia, as well as deterring Arm from developing new products and designs that are incompatible with Nvidia's own interests.
Nvidia has stated that it will continue to use Arm's open licencing model for providing semiconductor designs to companies such as Apple, Qualcomm, Samsung, Amazon, and others. Nvidia CEO Jensen Huang stated that the company has no plans to 'throttle' or 'deny' any customer Arm's supply.
Aside from the FTC, the European Union has launched a formal investigation into the deal, and the UK's Competition and Market Authority is looking into the potential national security risks and competition concerns in greater detail.
For those unfamiliar, Nvidia announced plans to buy a UK-based Arm from SoftBank for $40 billion in September 2020. International regulators and industry heavyweights have both criticised the agreement.
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