FTC sues Nvidia to block historic trade with weapons

Federal transaction The commission urged Nvidia to block the acquisition of semiconductor design firm Arm, saying the blockbuster deal would unfairly curb competition.

“FTC is trying to prevent the merger of the largest semiconductor chips in history to prevent chip conglomerates from disrupting the innovation pipeline of next-generation technologies,” said Holly Bedova, director of the FTC’s Competition Bureau. It is stated in. “Tomorrow’s technology depends on maintaining today’s competitive, cutting-edge chip market. This proposed deal distorts Arm’s incentives in the chip market, and integrated companies make Nvidia rivals. It makes it possible to unreasonably weaken. “

Nvidia first announced its intention to acquire Arm in September 2020. At the time, the transaction value was $ 40 billion, but since then Arm’s stock price has skyrocketed and the transaction costs of cash and stock have risen to $ 75 billion. The FTC proceedings threaten to close the deal altogether.

“As we move on to the next step in the FTC process, we will continue to strive to demonstrate that the transaction will benefit the industry and drive competition,” a Nvidia spokeswoman told Ars. “Nvidia is committed to maintaining Arm’s open licensing model and making its IP available to all interested licensees now and in the future.”

FTC was not the first government regulator to scrutinize the transaction. In October, the European Union announced that it was investigating a takeover, and last month British officials said they were concerned that the merger could threaten both competition and national security. Chinese regulators are also considering the deal, according to Nvidia.

Much of the anxiety over the acquisition is that Arm is a relatively neutral player in the semiconductor world for much of its history, giving access to its intellectual property to almost anyone willing to pay a license fee. It stems from the fact that it offers. In complaints, FTC called Arm the “Switzerland” of the semiconductor industry. Customers are afraid that Nvidia-controlled Arm will be at the mercy of competitors, but regulators are concerned that the acquisition could disrupt a large, prosperous ecosystem that relies on architecture. doing.

Arm started out as a niche semiconductor designer, providing low-power chips for embedded systems and portable devices such as Apple Newton and the PalmPilot. Over the years, as ARM chips have improved in performance and energy efficiency has become more important, semiconductors have been adopted in a wider range of devices.

Today, Arm designs and instruction sets are widely used in everything from mobile phones to servers, automobile airbag controllers, and supercomputers. Recently, ARM chips have begun to penetrate the PC world, increasing pressure on existing Intel and AMD. Apple’s M1 chip shows how competitive the architecture is with the x86 design, and other chips are starting to follow suit. Earlier this week, Qualcomm announced a new Snapdragon processor, the nasty name 8cx Gen 3. It runs an ARM-specific version of Windows.

Chips are taking over the industry because the ARM architecture is low power and is available to so many different companies. Last year, the company sold 25 billion ARM chips, more than quadrupling from 2010.

Nvidia is becoming an increasingly powerful player in the semiconductor world. The graphics card became a major tool for machine learning and other artificial intelligence applications, and soon the company began selling chips for high-performance computing. The mobile Tegra chip, which licenses Arm’s design, powered a range of smartphones and Tesla infotainment systems in the mid-2010s and now runs within Nintendo’s Switch.

FTC sues Nvidia to block historic trade with weapons

Source link FTC sues Nvidia to block historic trade with weapons

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