In the biggest roadblock yet to NVIDIA’s proposed acquisition of Arm, the United States Federal Trade Commission (FTC) has announced this afternoon that the regulatory body will be suing to block the merger. Citing concerns over the deal “stifling the innovation pipeline for next-generation technologies”, the FTC is moving to scuttle the $40 billion deal in order to protect the interests of the wider marketplace.

The deal with current Arm owner SoftBank was first announced in September of 2020, where at the time SoftBank had been shopping Arm around in an effort to either sell or spin-off the technology IP company. And while NVIDIA entered into the deal with bullish optimism about being able to close it without too much trouble, the company has since encountered greater political headwinds than expected due to the broad industry and regulatory discomfort with a single chip maker owning an IP supplier used by hundreds of other chip makers. The FTC, in turn, is the latest and most powerful regulatory body to move to investigate the deal – voting 4-0 to file the suit – following the European Union opening a probe into the merger earlier this fall. The

While the full FTC complaint has yet to be released, per a press release put out by the agency earlier today, the crux of the FTC’s concerns revolve around the advantage over other chip makers that NVIDIA would gain from owning Arm, and the potential for misconduct and other unfair acts against competitors that also rely on Arm’s IP. In particular, the FTC states that “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.”

To that end, the FTC’s complaint is primarily focusing on product categories where NVIDIA already sells their own Arm-based hardware. This includes Advanced Driver Assistance Systems (ADAS) for cars, Data Processing Units (DPUs) and SmartNICs, and, of course, Arm-based CPUs for servers. These are all areas where NVIDIA is an active competitor, and as the FTC believes, would provide incentive for NVIDIA to engage in unfair competition.

More interesting, perhaps, is the FTC’s final concern about the Arm acquisition: that the deal will give NVIDIA access to “competitively sensitive information of Arm’s licensees”, which NVIDIA could then abuse for their own gain. Since many of Arm’s customers/licensees are directly reliant on Arm’s core designs (as opposed to just licensing the architecture), they are also reliant on Arm to add features and make other alterations that they need for future generations of products. As a result, Arm’s customers regularly share what would be considered sensitive information with the company, which the FTC in turn believes could be abused by NVIDIA to harm rivals, such as by withholding the development of features that these rival-customers need.

NVIDIA, in turn, has announced that they will be fighting the FTC lawsuit, stating that “As we move into this next step in the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition.”

Ultimately, even if NVIDIA is successful in defending the acquisition and defeating the FTC’s lawsuit, today’s announcement means that the Arm acquisition has now been set back by at least several months. NVIDIA’s administrative trial is only scheduled to begin on August 9, 2022, almost half a year after NVIDIA initially expected the deal to close. And at this point, it’s unclear how long a trial would last – and how long it would take to render a verdict.

Source: United States Federal Trade Commission

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  • Oxford Guy - Thursday, December 9, 2021 - link

    So, spamming emojis is your advice? Okay, noted. Reply
  • Qasar - Sunday, December 12, 2021 - link

    nope its me laughing at yet another one of your " im angry at the world and every one in it posts, have you thought about seeing a councilor about your anger issues ? Reply
  • RealBeast - Monday, December 6, 2021 - link

    You are apparently not a lawyer. SCOTUS says that for most purposes corporations are people, including many Constitutional rights guaranteed to people. Here is a little history of the development: https://www.npr.org/2014/07/28/335288388/when-did-... Reply
  • mode_13h - Tuesday, December 7, 2021 - link

    > You are apparently not a lawyer.

    That much is clear.
    :P

    > SCOTUS says that for most purposes corporations are people,

    That's ultimately a pragmatic position, rather than a fundamental one. Also rather lazy, IMO. There are other approaches one could take, such as to *explicitly* delineate the rights and privileges of corporations, rather than essentially saying: "oh, and whatever goes for humans also applies to corporations".

    I disagree that corporations should be granted the same rights as humans. They differ in many important ways: they're trivially created and destroyed, they're not subject to the same norms of behavior as adult humans, and non-publicly-traded corporations (in particular) lack transparency in ways that make them ripe for abuse.

    Someday, we'll have to grapple with whether non-humans should be treated as people. Maybe it'll be the development of sentient AI's that forces the issue.
    Reply
  • Oxford Guy - Tuesday, December 7, 2021 - link

    ‘Pragmatic’ is one of the euphemisms used by people when they know they can, and should, do better — but don’t want to. Reply
  • mode_13h - Wednesday, December 8, 2021 - link

    > they know they can, and should, do better — but don’t want to.

    ...or "lazy", in a word.

    > ‘Pragmatic’ is one of the euphemisms used by people when

    Now that we've established that we're in agreement on this specific point, I'm going to take issue with that blanket characterization of "pragmatic". Any good dictionary (yes, even the OED) will tell you that pragmatism isn't necessarily synonymous with laziness.

    In this case, I think you're right that it is.
    Reply
  • GeoffreyA - Friday, December 10, 2021 - link

    Pocket OED: "dealing with matters from a practical point of view" Reply
  • GeoffreyA - Friday, December 10, 2021 - link

    pragmatic Reply
  • Oxford Guy - Tuesday, December 7, 2021 - link

    ‘SCOTUS says that for most purposes corporations are people’

    Have you spoken with Dredd Scott about that?
    Reply
  • meacupla - Friday, December 3, 2021 - link

    Yeah, that's probably because you need a CPU to run a GPU, and you don't need a GPU to run a CPU. So, it's kind of like a parasitical relationship, where one needs the other, but the other doesn't necessarily need the other to survive.

    For GPUs, you still have nvidia as the main competition, but there were a multitude of smaller makers that did graphics. At the time, I think this would have been primarily Intel, VIA, and Matrox.

    Where as, for ARM, in this day and age, there is, literally, only ARM licensed designs.
    So ARM has a monopoly in ARM, and nvidia, being one of the main competitors of ARM licensed designs, stands to benefit immensely over their competition, if nvidia is allowed to buy ARM.

    And don't confuse ARM with RISC-V, those two are related, but totally different things.
    Reply

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