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The United States Federal Trade Commission today announced that it has filed a lawsuit to block Nvidia from acquiring Arm in a deal worth $40 billion.

arm-logo-blue-bg.jpg

According to the FTC, the deal would give Nvidia, one of the largest chip companies, control over computing technology and designs that rival firms rely on to develop competing chips. The FTC believes an acquisition would stifle "innovative next-generation technologies." The combined firm would be able to "unfairly undermine" Nvidia's competitors.
"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."
Nvidia's plan to acquire Arm from SoftBank was announced back in September 2020. At the time, Nvidia said that it would use the Arm acquisition to create the "world's premiere computing company for the age of AI." Nvidia pledged to continue Arm's open licensing model and customer neutrality, but that hasn't convinced companies like Qualcomm, which has opposed the deal.

Qualcomm in February told the FTC, the European Commission, the UK Competition and Markets Authority, and China's State Administration for Market Regulation that it was against Nvidia's acquisition of Arm. Qualcomm said that Nvidia could become the gatekeeper for Arm's technology, which could prevent other chipmakers from using it.

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

The FTC has sided with Qualcomm, and believes that the merger would give Nvidia "the ability and incentive" to use control over Arm technology to undermine its competitors and reduce competition. According to the lawsuit, an Nvidia acquisition of Arm could impact high-level advanced driver assistance systems, DPU SmartNICs for datacenter servers, and Arm-based CPUs for cloud computing service providers.

An acquisition would also give the merged company "less incentive to enable otherwise new beneficial features or innovations" if Nvidia decides that these innovations would harm Nvidia.

Article Link: U.S. Federal Trade Commission Sues to Block Nvidia's Planned Arm Acquisition
 
As much I love Nvidia GPU, please block Nvidia. I really don't want other competitor falter because of Nvidia changes the policy anti-competition practice and this potentially can harm Apple, Qual and many smaller companies from development for better technologies.

We need diversity in technologies. <- whatever that means.
 
Whoa, this is unexpected. I'm not a huge fan of acquisitions and consolidation of competitors, but I'm not sure that's what this is, and I'm not sure I like the precedent...

CPU/GPU integration is obviously important this leaves fewer fully integrated competitors out there.

I'm open to arguments in favor though.
 
The pandemic and chip shortage has gone to show us how important chips are to the future of every facet of life. It's probably good there is an increased focus on this area of the economy, particularly given the absurd amounts NVIDIA is charging for their latest GPU's pre-acquisition.
 
Wouldn’t be surprised if Apple filed the objection to ARM being bought out by Nvidia considering how much they hate them for graphics card disaster, resulting in FTC suing Nvidia.

As stated in the article, it was Qualcomm who filed the objection. While Apple might not be thrilled, unlikely that they objected as they aren’t actually affected by this potential merger. They have a perpetual ISA license. The potential conflicts of interest center around the core licenses and ancillary technology licenses which directly affects Nvidia and its competitors/customers.
 
Wouldn’t be surprised if Apple filed the objection to ARM being bought out by Nvidia considering how much they hate them for graphics card disaster, resulting in FTC suing Nvidia.
I dunno.

Officially, I haven't seen a single peep out of Apple about it. There have been others (notably Google, MS, and Qualcomm) who have publically objected to it, but Apple hasn't joined them.

I *think* this might be because Apple doesn't really care. They have a perpetual architecture license. I really wish I could track down the article right now, but it's my understanding that it really doesn't matter what happens to ARM ownership. Apple's license will survive that and allow it to continue with business as usual.

I know Apple isn't Nvidia's biggest fan right now, but now that Apple make their own CPUs and GPUs, I can't really say that AMD would be Apple's biggest fan either. They are basically competitors now.

In other words, I think that as long as ARM has deep pockets behind it to continue development, Apple's happy.

Edit: Found it the article I was remembering.

 
Whoa, this is unexpected. I'm not a huge fan of acquisitions and consolidation of competitors, but I'm not sure that's what this is, and I'm not sure I like the precedent...

CPU/GPU integration is obviously important this leaves fewer fully integrated competitors out there.

I'm open to arguments in favor though.

It’s pretty straightforward really and not that surprising. While the FTC is the first regulatory agency to formally object, pretty much all of them (the UK, EU, China, Japan) were looking into it and making unhappy noises. ARM is already an integrated GPU/CPU licensing body and the crux of the matter for Nvidia’s competition is how does Nvidia plan on making their $40bn acquisition profitable? Where’s the benefit from owning ARM as opposed to licensing from them? The easiest way is to cut off IP that doesn’t benefit Nvidia and sequester IP that does. And nobody is buying Nvidia’s promises that they won’t do either. Maybe Nvidia means it, but nobody believes them.
 
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