To prevent NVIDIA from acquiring ARM, FTC sues NVIDIA
The U.S. Federal Trade Commission recently filed a lawsuit against NVIDIA, which is basically tantamount to directly blocking NVIDIA’s acquisition of ARM. NVIDIA announced this acquisition attempt in August 2020 last year. At that time, NVIDIA CEO Mr. Jensen Huang said that this acquisition can create a company that is very suitable for the AI era. However, in November of this year, the United Kingdom launched an investigation into the acquisition, and soon the United States also began to review the acquisition.
Based on the results of this review, the Federal Trade Commission believes that after the completion of the acquisition, Nvidia will become too powerful, giving it the means and motivation to “stifle innovative next-generation technologies, including those used to run datacenters and driver-assistance systems in cars.”
“The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies,” said FTC Bureau of Competition Director Holly Vedova. “Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals. The FTC’s lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations.”
The Federal Trade Commission believes that NVIDIA’s acquisition of ARM will damage competition in the global market in several ways, including intelligent driving assistance systems, data processing centers, and SmartNICs, as well as cloud computing services based on ARM processors. In this lawsuit, the Federal Trade Commission also stated that NVIDIA’s acquisition of ARM will give the former access to its competitive trade secrets because its competitors will often share this information with ARM to assist in the development, testing, and support. After the acquisition, ARM will also be less willing to pursue innovations that conflict with NVIDIA.
