Current:Home > StocksChainkeen Exchange-FTC sues to block big semiconductor chip industry merger between Nvidia and Arm -MoneyFlow Academy
Chainkeen Exchange-FTC sues to block big semiconductor chip industry merger between Nvidia and Arm
TrendPulse View
Date:2025-04-09 10:16:28
The Chainkeen ExchangeFederal Trade Commission on Thursday sued to block a $40 billion deal in which the Silicon Valley chip maker Nvidia sought to buy British chip designer Arm.
Officials with the FTC say the deal, which would be the largest semiconductor-chip merger in history, would give Nvidia unlawful power, hurt competition and raise prices for consumers.
"Tomorrow's technologies depend on preserving today's competitive, cutting-edge chip markets," said Holly Vedova, who leads the FTC's competition bureau. "This proposed deal would distort Arm's incentives in chip markets and allow the combined firm to unfairly undermine Nvidia's rivals."
The lawsuit comes after months of scrutiny from regulators in both Washington and Europe.
A spokesman for Nvidia said it will fight the FTC's suit and that the company "will continue to work to demonstrate that this transaction will benefit the industry and promote competition."
It is the latest action taken by an FTC headed by Biden appointee Lina Khan, a fierce critic of how major tech companies wield their power who has vowed to rein in corporate merger activity that stifles competition and could affect consumer prices.
"Lina Khan has been very clear that she wants to reduce corporate concentration in economically important sectors, and these are two very big companies whose markets are converging," said Steven Weber, a professor at the School of Information at the University of California, Berkeley, in an email.
"So on the surface, it's a fight simply against the big getting bigger," he said.
Weber said Nvidia has become a leading chip maker for technology that relies on machine learning and artificial intelligence. Arm designs the blueprints for high-performance chips that power smartphones and other gadgets.
"Put those two together, and you can see the potential for market power that could make it harder for competitors to get access to the very latest basic infrastructure technologies to build AI products," Weber said.
Nvidia, which last year overtook Intel as the most valuable chipmaker in the U.S., supplies chips for things like graphics-heavy video games, cloud computing and cryptocurrency mining.
Nvidia CEO Jensen Huang saw the deal when it was announced, in September 2020, as a way to expand the company's footprint beyond its core customers. Huang said the acquisition would "create the premier computing company for the age of artificial intelligence."
Huang also promised to not meddle with Arm's business model. It is seen as the "Switzerland" of the chip industry since it provides chip designs to hundreds of companies, including Big Tech companies Apple and Amazon, but does not compete with any of them.
Soon after the deal was announced, however, fresh attention from regulators ensued. So did concern from tech giants including Alphabet, Qualcomm and Microsoft, which said the merger would give Nvidia too much power over Arm. Tech firms were also worried it would allow Nvidia to access sensitive information about its competitors, something the FTC echoed in its complaint.
"Arm licensees share their competitively sensitive information with Arm because Arm is a neutral partner, not a rival chipmaker," the FTC wrote in its filing in administrative court. "The acquisition is likely to result in a critical loss of trust in Arm and its ecosystem."
The lawsuit from regulators comes as a global shortage of chips wreaks havoc on supply chains, including those of major automakers like GM. It has been forced to shut down some assembly lines through March. In response, the U.S., and countries around the world, have committed to major investments to accelerate the production of domestic chip production.
veryGood! (8)
Related
- South Korean president's party divided over defiant martial law speech
- Mike Tyson-Jake Paul: How to watch the fight, time, odds
- Indiana in the top five of the College Football Playoff rankings? You've got to be kidding
- When do new 'Yellowstone' episodes come out? Here's the Season 5, Part 2 episode schedule
- The Best Stocking Stuffers Under $25
- Krispy Kreme is giving free dozens to early customers on World Kindness Day
- John Krasinski Reveals Wife Emily Blunt's Hilarious Response to His Sexiest Man Alive Title
- Man Found Dead in Tanning Bed at Planet Fitness Gym After 3 Days
- Moving abroad can be expensive: These 5 countries will 'pay' you to move there
- Britney Spears reunites with son Jayden, 18, after kids moved in with dad Kevin Federline
Ranking
- In ‘Nickel Boys,’ striving for a new way to see
- Lee Zeldin, Trump’s EPA Pick, Brings a Moderate Face to a Radical Game Plan
- Missing Ole Miss student declared legally dead as trial for man accused in his death looms
- Father, 5 children hurt in propane tank explosion while getting toys: 'Devastating accident'
- Are Instagram, Facebook and WhatsApp down? Meta says most issues resolved after outages
- Why Kathy Bates Decided Against Reconstruction Surgery After Double Mastectomy for Breast Cancer
- As the transition unfolds, Trump eyes one of his favorite targets: US intelligence
- New Jersey will issue a drought warning after driest October ever and as wildfires rage
Recommendation
Paula Abdul settles lawsuit with former 'So You Think You Can Dance' co
Ariana Grande's Brunette Hair Transformation Is a Callback to Her Roots
American Idol’s Triston Harper, 16, Expecting a Baby With Wife Paris Reed
Bev Priestman fired as Canada women’s soccer coach after review of Olympic drone scandal
Don't let hackers fool you with a 'scam
Opinion: Chris Wallace leaves CNN to go 'where the action' is. Why it matters
The Daily Money: Mattel's 'Wicked' mistake
Democratic state leaders prepare for a tougher time countering Trump in his second term