NVIDIA Arm Acquisition to be blocked by United States

The United States Federal Trade Commission (FTC) said this afternoon that it will sue to prevent NVIDIA proposed acquisition of Arm, which is the biggest barrier yet to the deal. The FTC is attempting to collapse the $40 billion agreement, citing fears that it will “stifle the innovation pipeline for next-generation technology” in order to protect the interests of the broader marketplace. SoftBank has been selling Arm around in an attempt to sell or spin-off the technology IP company when the arrangement with current owner SoftBank was first disclosed in September of 2020.

While NVIDIA went into the transaction with high hopes of getting it done quickly, the business has now run into more political headwinds than planned, owing to widespread industry and regulatory concerns about a single chip maker controlling an IP source utilised by hundreds of other chip makers. Following the European Union’s opening of a probe into the merger earlier this fall, the FTC is the latest and most powerful regulatory authority to move to investigate the deal, voting 4-0 to file the lawsuit.

The FTC’s main worries, according to a news release issued by the agency earlier today, are around NVIDIA potential advantage over other chip makers from owning Arm, as well as the possibility for misconduct and other unfair activities against competitors who also rely on Arm’s IP.

To that aim, the FTC’s complaint focuses mostly on product categories in which NVIDIA currently sells Arm-based technology. Advanced Driver Assistance Systems (ADAS) for automobiles, Data Processing Units (DPUs) and SmartNICs, and, of course, Arm-based CPUs for servers are all included.