In September 2020, NVIDIA announced its intent to acquire ARM, a semiconductor design company, in a $40 billion deal. That deal has already received some flack in Europe, but now the U.S’s very own trade regulators are filing a lawsuit to block the merger. 🥊
The U.S. Federal Trade Commission is suing NVIDIA over its ARM merger for “stifling” competition. It suggests that NVIDIA could influence ARM to stop producing valuable IP for the rest of the tech world. Specifically, the FTC worries that NVIDIA’s deal could “undermine competitors, reduce competition and ultimately result in reduced product quality, reduced innovation, higher prices, and less choice” throughout semiconductor and tech markets.
NVIDIA’s not acting like the lawsuit is a huge issue, but it’s no joking matter… after all, Qualcomm, Apple, MediaTek, and Samsung all rely on ARM technology. NVIDIA released a statement claiming the company will encourage ARM to continue making IP beneficial to the greater tech market:
“…NVIDIA is committed to preserving ARM’s open licensing model and ensuring that its IP is available to all interested licensees, current and future.”
We’ll be watching to see where this goes. But given these hurdles, NVIDIA might have a looong road ahead of them. 🕵️♀️ $NVDA stock seemed unbothered, gaining 2.2%.