US regulators sue to block Nvidia’s acquisition of Arm

US regulators sued to block NvidiaThe billion-dollar acquisition of British chip design firm Arm from SoftBank comes after European and US authorities raised concerns about the relationship.

The Federal Trade Commission said in a statement on Thursday that the transaction, which would be the largest acquisition by a semiconductor conglomerate, would give one of the world’s largest chip corporations control of for the computer technology and design that competitors rely on to make their own chips.

The case is the latest major antitrust move by the Biden administration, which has pledged to limit the power of big business by eliminating anticompetitive practices.

The FTC pegged the value of the chip trade at $40 billion, but the cash and stock trade is now worth $82 billion after Nvidia’s share price skyrocketed. Nvidia will have to pay SoftBank a $1.25 billion breakup fee if the deal falls through.

The regulator alleges that the combined company will “have the means and incentives to prevent innovative next-generation technologies, including those used to run data centers and systems.” assist the driver in the car”.

Holly Vedova, director of the FTC’s competition office, said the regulator was taking action to “prevent a chip corporation from disrupting innovation for next-generation technologies”.

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Nvidia in a statement said it will “continue to work to demonstrate that this transaction will benefit the industry and promote competition,” adding it will invest in Arm’s research & development. , maintain an open licensing model, and ensure their intellectual property is “available to all interested licensees”.

The FTC’s move comes after Nvidia last month said the regulator had “Express concern” about the Arm transaction, and that it was discussed with the agency about “remedial measures to address those concerns”.

The UK had earlier launched an in-depth investigation into the links between competing facilities and national security. The European Commission began looking at its own expansion in October.

Additional reporting by James Fontanella-Khan

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