Nvidia to broaden its business purview had signed a definitive agreement to purchase Arm back in September 2020. It has since been over a year and the deal is yet to go through. The delay can be attributed to various regulatory authorities putting up a hurdle in front of the companies to help maintain a balance of power in the market.
The estimated $40 billion deal recently faced major pushback from the European Commission and the United Kingdom Competitions and Market Authority. Now, the US Federal Trade Commission (FTC) has announced that it is suing to stop the Nvidia Arm deal.
Nvidia designs and manufactures some of the best graphic cards currently available in the market. Whereas, Arm is a semiconductor and software design company that develops the widely-used ARM architecture.
“The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies,” said FTC in a public statement.
Why is FTC opposing the Nvidia Arm deal?
FTC believes that this deal could create an anti-competitive environment across the chipset industry, which is already under heavy duress. The main concern for FTC is that the deal will allow Nvidia to gain access to deals and agreements Arm has, which will allow it to know its competitors’ strategies and weaknesses ahead of time and tailor its products accordingly. It would also control access to Arm’s products to competitors who gain too much ground.
To recall, Google, Microsoft, and Qualcomm are a few major brands to have expressed concerns over the deal. However, Nvidia states that it will maintain Arm’s current neutral licensing model.
The Arm acquisition should complete by the end of 2022 according to Nvidia’s timeline. However, the daily hurdles and today’s news of the FTC suing seems to make the deal unlikely.
The post US FTC to likely block Nvidia Arm purchase deal: Here’s why appeared first on BGR India.