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The US Federal Trade Commission has sued to block Nvidia’s planned arms procurement


The Federal Trade Commission of the United States announced today that it has filed a lawsuit to prevent Nvidia from buying Arm in a deal worth 40 billion dollars.

According to the FTC, the agreement would give Nvidia, one of the largest chip companies, control over the computer technology and design that competing firms rely on to develop competing chips. The FTC believes the acquisition would stifle “next-generation innovative technologies”. The combined firm could “unfairly undermine” Nvidia’s competitors.

“The FTC is suing to block the largest semiconductor chip merger in history to prevent the chip conglomerate from stifling the innovation pipe for next-generation technology,” said FTC Competition Bureau Director Holly Vedova. “Tomorrow’s technologies depend on maintaining today’s competitive, state-of-the-art chip market. This proposed agreement would undermine Arm’s chip market incentives and allow the combined firm to unfairly undermine Nvidia’s rivals. The FTC lawsuit should send a strong signal to act aggressively to protect our markets.” critical infrastructures from illegal vertical mergers that have far-reaching and detrimental effects on future innovation. “

Nvidia’s plan to buy Arm from SoftBank was announced in September 2020. At the time, Nvidia said it would use Arma’s acquisition to create “the world’s first AI-era computer company”. Nvidia has pledged to continue Arm’s open licensing model and customer neutrality, but that hasn’t convinced companies like Qualcomm, which has opposed the deal.

In February, Qualcomm told the FTC, the European Commission, the UK Competition and Markets Authority and the Chinese National Market Administration that it was against Nvidia’s acquisition of Arma. Qualcomm said Nvidia could become the custodian of Arm’s technology, which could prevent other chipmakers from using it.

Qualcomm has suggested that the only way Nvidia could make its acquisition profitable would be to limit Arm’s technology. Arm licenses its chip technology to more than 500 companies, including Apple, so there are big concerns about potential licensing changes.

The FTC has sided with Qualcomm and believes the merger would give Nvidia the “ability and incentive” to use control of Arm technology to undermine its competitors and reduce competition. According to the lawsuit, Nvidia’s acquisition of Arma could leverage advanced high-level driver assistance systems, DPU SmartNICs for data center servers, and Arm-based CPUs for cloud computing service providers.

The acquisition would also give the merged company “less incentive to provide otherwise new useful features or innovations” if Nvidia decides that these innovations would harm Nvidia.



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