Nvidia’s Aquisition of ARM Hits Another Roadblock: Gets Sued by The FTC

Nvidia ARM Merger 1

Nvidia’s ARM acquisition is one of the most controversial mergers ever, with the European Union opening a probe to investigate the acquisition based on anti-competitive behaviour. That said, the USD 40 billion acquisition has reportedly hit another roadblock as USAs FTC (Federal Trade Commission) has filed a lawsuit against the company, again on the grounds of anti-competitive behaviour as per various complaints from GoogleMicrosoft, and Qualcomm shortly after the merger.

According to a statement by FTC Bureau of Competition Director Holly Vedova, “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,”

The FTC lawsuit was concerned that this merger would allow Nvidia to undermine competition and have an unfair advantage. Nvidia would gain access to sensitive information from various ARM licensees who already compete with Nvidia.

As you can see, many of the largest tech companies including Apple, Qualcomm, Mediatek, Samsung and many more, are directly dependent upon ARM to design and build their chips. Although ARM doesn’t make the chipsets themselves, instead they own the design of the chips and other related intellectual property (IP), which is then licenced out to other tech companies, while it is up to the licensee to manufacture the chips themselves or outsource it from fabs like TSMC, or Samsung Semiconductors.

However, if Nvidia owns ARM, it could seriously undermine competition. It would simply know which chipset designs are behind a company’s success, which could end up with Nvidia keeping the more powerful chipset designs to itself while limiting access for other competitive players.

While according to a Financial Times editorial, Nvidia CEO Jensen still ‘unequivocally states that the company will maintain ARM’s open licencing model. We have no intention to ‘throttle’ or ‘deny’ ARM’s supply to any customer.”

Overall, it seems that the FTC has a great point of argument and that the merger will have to pass through major scrutiny if it is ever to happen.

Also Read: Nvidia’s Next-Gen Flagship Graphics Cards Might Arrive as Soon as Next Year

What are your thoughts on the FTC’s decision to sue Nvidia’s ARM acquisition? Let us know in the comments below. Until then, stay tuned to Oyprice and subscribe to our YouTube channel. Also, follow us on TelegramFacebook, and Twitter.

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