Regulators in US, UK, EU all alarmed by chip maker Nvidia's $40B deal to buy chip designer

Regulators in US, UK, EU alarmed by chipmaker Nvidia's $40B deal to buy chip designer

News, Federal Trade Commission

12/3/2021 4:06:00 PM

Regulators in US, UK, EU alarmed by chipmaker Nvidia 's $40B deal to buy chip designer

The Federal Trade Commission claimed that the deal would give Nvidia control over technology that other companies need to manufacture their own chips.

are all alarmed by chipmaker Nvidia Corporation's $40 billion deal to buy chip designer Arm Ltd. from the Japanese technology company Softbank.On Thursday, the Federal Trade Commission filed a lawsuit to block the deal, saying it make the Nvidia, based in Santa Clara, California, so powerful that it could hinder opportunities for new technology from elsewhere.

U.K. and E.U. regulators have also begun investigations on the deal due to concerns about competition,The Associated Pressreported.The deal has some concerned that Arm, based in the U.K., would stop licensing chip designs to tech companies, including competitors of Nvidia.

"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," FTC Bureau of Competition Director Holly Vedova said in a news release."This proposed deal would distort Arm's incentives in chip markets and allow the combined firm to unfairly undermine Nvidia's rivals." headtopics.com

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The FTC claimed that the deal would give Nvidia control over the technology that other companies need to manufacture their chips. Competitors in markets where Nvidia designs with Arm-based technology could be hurt, the FTC says.Nvidia said that by buying Arm, it could"create the world's premier computing company for the age of AI."

The company also said it would"continue to work to demonstrate that this transaction will benefit the industry and promote competition." It said it is"committed to preserving Arm's open licensing model and ensuring that its IP is available to all interested licensees, current and future."

The company said it will"vigorously contest" the FTC's lawsuit.For more reporting from the Associated Press, see below.People gather in the Nvidia booth at the Mobile World Congress mobile phone trade show Thursday, Feb. 27, 2014 in Barcelona, Spain. The Federal Trade Commission on Thursday, Dec. 2, 2021 sued to block graphics chip maker Nvidia’s $40 billion purchase of chip designer Arm, saying the deal would create a powerful company that could hurt the growth of new technologies.

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Manu Fernandez/AP Photo, FileMany of the world's smartphones run on Arm's chip designs and it is a vital supplier for companies likeApple

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