Image: FTC

NVIDIA has hit what appears to be its biggest stumbling block yet in its long and windy road to acquiring British chip designer Arm. As revealed in a press release published yesterday, the Federal Trade Commission has decided to sue the premier GPU company, arguing that the deal, valued at $40 billion, will ultimately stifle and harm competition. Higher prices and less choice are just two of the consequences that Americans will face if the merger were to go through, the FTC alleges.

The complaint lists the following worldwide markets that would be harmed by the merger:

1. High-Level Advanced Driver Assistance Systems for passenger cars. These systems offer computer-assisted driving functions, such as automated lane changing, lane keeping, highway entrance and exit, and collision prevention;
2. DPU SmartNICs, which are advanced networking products used to increase the security and efficiency of datacenter servers; and
3. Arm-Based CPUs for Cloud Computing Service Providers. These new and emerging products leverage Arm’s technology to meet the performance, power efficiency, and customizability needs of modern datacenters that provide cloud computing services. “Cloud computing” refers to the increasingly popular computing business model in which large datacenter operators provide computing services remotely and/or directly offer computing resources for rent, as well as provide other support services to customers who can then run applications, host websites, or perform other computing tasks on the remote servers—i.e., “the cloud.”

“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.”

Source: FTC

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9 Comments

  1. Now the question is does ARM and Nvidia circumvent this process by creating multiple pieces of ARM for Nvidia to swallow up, or does Nvidia pull an Alphabet and make itself a parent company, then do an Acquisition of ARM without an official merger but still reaping be benefits of the IP availability going both ways?

    I suspect the second is more likely. Or some sort of strategic partnership is created where Nvidia buys a non controlling portion of ARM for a large cash infusion creating a partnership.

    1. It’s dumb because ARM wants to sell and NVIDIA is the only one willing to put up that amount of money.

      NVIDIA will be the only one who will be buying it. All this does is delay it for no reason other than the FTC people probably need to secure all their NVIDIA stock first.

  2. Yeah, someone said on here, “it didn’t hurt NVIDIA’s stock” well, you never call it on the same day because just the past couple of days, NVIDIA shares plummeted over 11% (~5% of that just today).

    Jensen:

    “All our extra scalping/mining money… gooOOoone… just like that… gooOOoone!!”

    Gamers:

    😂🙃🙃😂

  3. It wouldn’t surprise me if Nvidia asked to be sued to get out of the deal without paying the penalty. I can’t imagine why the FTC would be so worried about bringing IP to US control via a US based company like Nvidia. Its either what I said, or Intel asked for it, someone is behind this and its not genuine concerns by the ftc.
    I am SHOCKED it wasn’t the Chinese stopping this, from all I read about Chinese government in general in US based media, I was certain they were going to be the stick in the mud.

  4. [QUOTE=”Uvilla, post: 44683, member: 397″]
    It wouldn’t surprise me if Nvidia asked to be sued to get out of the deal without paying the penalty. I can’t imagine why the FTC would be so worried about bringing IP to US control via a US based company like Nvidia. Its either what I said, or Intel asked for it, someone is behind this and its not genuine concerns by the ftc.
    I am SHOCKED it wasn’t the Chinese stopping this, from all I read about Chinese government in general in US based media, I was certain they were going to be the stick in the mud.
    [/QUOTE]

    I thoght they had to pay the $1.25B if the deal does not move forward in a timely fashion, regardless of the reason, lawsuit or not.

  5. [QUOTE=”Zarathustra, post: 44684, member: 203″]
    I thoght they had to pay the $1.25B if the deal does not move forward in a timely fashion, regardless of the reason, lawsuit or not.
    [/QUOTE]
    Im sure there’s caveats, about things Nvidia can’t help the situation about it. I can’t imagine there wouldn’t… I mean it would be ballsy and fairly foolish if there weren’t caveats on it.

  6. The cost is probably slightly more than was already spent to prepare for the merger. There is a lot of work to undo if this falls through and considerable security risk to both companies.

    Those ad trusts and dedicated 10 gig connections not to mention potential for network routers and new firewalls are not cheap.

  7. [QUOTE=”GunShot, post: 44679, member: 1790″]
    Yeah, someone said on here, “it didn’t hurt NVIDIA’s stock” well, you never call it on the same day because just the past couple of days, NVIDIA shares plummeted over 11% (~5% of that just today).

    Jensen:

    “All our extra scalping/mining money… gooOOoone… just like that… gooOOoone!!”

    Gamers:

    😂🙃🙃😂
    [/QUOTE]
    The whole market has been down during that time. The ARM sale had not been priced into the share price so it can’t exactly be taken out of it. See [URL]https://finance.yahoo.com/news/nvidias-latest-earnings-report-is-nail-in-coffin-for-40-billion-arm-deal-analyst-172042020.html[/URL]

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