NVIDIA, what a blow! The purchase of Arm more and more at risk: the FTC wants to block it

Further investigations by the UK and the European Commission were not sufficient for NVIDIA the purchase of Arm becomes even more difficult: The United States Federal Trade Commission (FTC) filed a complaint With the objective of block acquisition of $40 billion.

“The proposed vertical deal would give one of the largest chip companies control of computer technology and designs that rival companies rely on to develop their own competing chips,” the FTC said in a statement. The Autorité argues that “the combined company would have the means and the incentive to stifle the innovative technologies of the next generation“, from those used in data centers to driver assistance systems in cars (ADAS).

jensen huang sad nv 28 10 2021

Holly Vedova, director of the FTC’s Competition Bureau, said it was necessary”protect critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations“.

The theme is always the same, that of the first hour, that under everyone’s eyes since NVIDIA announced the operation: Arm does not produce or sell chips, but creates and licenses projects and architectures to other tech companies, including Apple, NVIDIA, Google, Qualcomm and thousands more around the world. The British designer, still in the hands of the Japanese fund Softbank, in practice the “Switzerland of Semiconductors”, a neutral player which powers the smartphone industry, automotive industry, and many other industries.

NVIDIA, for its part, is one of the largest computer companies in the world, with a very different business model from that of Arm: it is feared that the merger undermine the status quo. According to the FTC, the settlement “would give NVIDIA the ability and incentive to use its hold on technology to undermine competitors“, leading to lower product quality and innovation, as well as higher prices and less choice, “harming the millions of Americans who benefit from ARM-based products.”

The FTC cites three sectors in particular that will be harmed by the merger: advanced driver assistance systems for cars, that of “DPU SmartNICs”, or even advanced network products for data centers and that of CPUs for the world. cloud computing. Remember that in 2023, NVIDIA plans to enter the world of data center processors with Project Grace, a development seen by the now absentee Arm co-founder as the ” smoking gun” of bad intentions from NVIDIA.

nvidia grace cpu 12 04 2021

An element of particular concern to the FTC which NVIDIA may have ‘access to sensitive information’ of Arm licenseessome of which are its rivals, and as such Arm may have less incentive to “pursue innovations that are perceived to conflict with NVIDIA’s business interests. Arm’s licensees share their sensitive competitive information with Arm because it is a neutral partner, not a rival chip manufacturer. the acquisition is likely to lead to a loss of confidence in Arm and its ecosystem“.

The decision to pursue the complaint was taken by the FTC commission unanimously (4 votes in favor to zero) and the start of the administrative process scheduled for August 9, 2022 – it appears quite clearly that, barring developments, the operation it will go beyond the initial timing (18 months from the announcement) that NVIDIA and Arm had given themselves to conclude the agreement.

NVIDIA, for its part, has always dismissed fears, publicly assuring its commitment to maintaining Arm’s role and licensing model, while ensuring the creation of effective “firewalls” to prevent the recirculation of sensitive data that could harm competition. it is clear that the arguments provided so far by NVIDIA to the authorities have not been completely convincing.

In a report, NVIDIA says it will continue to work to demonstrate the deal will benefit the industry and promote competition. NVIDIA will invest in Arm research and development, accelerate its roadmaps, and expand its offerings to increase competition, create more opportunities for all licensees, and expand the ecosystem. NVIDIA is committed to preserving Arm’s open licensing model and ensuring that its intellectual property is available to all current and future licensees. »

Gift ideas, why waste time and risk making mistakes?