US Federal Trade Commission on Thursday announced it was suing to prevent NVIDIA from acquiring chipmaker ARM.
With a deal worth over US$40 billion, NVIDIA will take powerful control over computing technology as well as designs that rival firms rely on in order to develop their own competing chipsets.
According to a report, FTC believes that a combination of NVIDIA and ARM will have the means and incentive to stifle innovative next-generation technologies, including those used to run data centers and driver-assistance systems in cars.
“Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets,” said FTC Bureau of Competition Director Holly Vedova.
“This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals,” Vedova added.
ARM is known in the industry as the main chip designer and it licenses its chip designs and other related technologies to its third-party partners like Qualcomm, Samsung, and Apple.
But it’s raised hackles with Arm licensees, many of which compete directly with Nvidia and are leery of Nvidia’s promises to preserve Arm’s independence and neutrality.
Nvidia will “work to demonstrate that this transaction will benefit the industry and promote competition,” the company said in an emailed statement.
“Nvidia will invest in Arm’s R&D, accelerate its road maps and expand its offerings in ways that boost competition, create more opportunities for all Arm licensees and expand the Arm ecosystem,” the spokesperson said.
“Nvidia is committed to preserving Arm’s open licensing model and ensuring that its IP is available to all interested licensees, current and future.”
EU already announced it was going to be investigating the deal as far back as October even before the US FTC’s attempt to block the deal.
UK government in fact said earlier in the month of Nov. that it will launch its own six-month investigation of the deal as well.
However, there have been reports that NVIDIA’s CEO Jensen Huang will probably not back down according to Bernstein Research analyst Stacy Rasgon on Thursday.
However, the success rate of the acquisition is slim due to the fact that the US regulatory authority is also working with regulatory authorities of other countries.
News about the acquisition was first announced back in SepT. 2020, with NVIDIA saying at the time it would “create the premier computing company for the age of artificial intelligence.”