The U.S. Federal Trade Commission (FTC) has filed suit seeking to block the merger of American chipmaker Nvidia and British chip designer ARM.
FTC sues to block $40B semiconductor chip merger: vertical deal between chip supplier Nvidia and chip design provider Arm would allow combined firm to stifle competing next-generation technologies. https://t.co/TCoLHIUTOJ
— FTC (@FTC) December 2, 2021
According to FTC representatives, ARM promotes competition between Nvidia and other semiconductor manufacturers. The merger could “undermine” rivals, including in data processing and artificial intelligence.
The agency also fears that the American chipmaker would gain access to confidential information from ARM licensees. The merger could reduce the incentive for the British company to develop technologies that run counter to Nvidia’s business objectives, the FTC added.
A hearing on the suit is scheduled for 9 August 2022.
Nvidia characterised the claims as “the next step” in the FTC process and repeated arguments in favour of the merger. According to them, the deal would “accelerate” ARM’s product roadmap, bolster competition and, at the same time, protect the open-licensing model:
«Nvidia seeks to preserve ARM’s open licensing model and ensure that its IP will be accessible to all interested licensees — current and future».
In September 2020, Nvidia announced it would acquire chip designer ARM for $40 billion. The deal was slated to close by March 2022, but regulatory interventions from various countries delayed the process.
A number of ARM partners, including Microsoft, Google and Qualcomm, opposed the purchase.
In April 2021, the UK government intervened in the deal over “national security considerations”.
In July, regulators in the United Kingdom announced the continuation of the investigation.
In November, sources in the British government said that the merger between the two companies is unlikely to go ahead, and ARM should return to the London Stock Exchange.
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