One of the biggest deals in the history of the chip industry was halted on Thursday by the Federal Trade Commission, which sued to block the acquisition of Arm by Nvidia.
The F.T.C. said that the deal between Arm and Nvidia would hurt consumers and stifle competition. The proposed deal would give Nvidia control over computing technology and designs that rival firms rely on to develop competing chips.
Holly Vedova, the director of the F.T.C.'s competition bureau, said that tomorrow's technologies depend on preserving today's competitive, cutting-edge chip markets. The proposed deal would allow the combined firm to unfairly undermine their rivals.
Federal antitrust regulators are trying to reignite competition in the economy by cracking down on monopolies. The Federal Trade Commission has taken the first major merger decision under the leadership of Lina Khan, a critic of big corporate mergers and monopolies in technology. Ms. Khan is one of the antitrust officials picked by President Biden to rein in the power of Silicon Valley giants.
The administration promised to break open gas, telecom and pharmaceutical markets to bring down consumer prices at the gas pump and for home internet and prescriptions. The Justice Department sued to stop the acquisition of Simon & Schuster by Penguin Random House.
The F.T.C. lawsuit will be fought by Nvidia, the company said in a statement. The transaction will benefit the industry and promote competition.
The merger will position the companies as leaders in the field of artificial intelligence. SoftBank is the owner of Arm.
At the time, Jensen Huang said that the combination of the two companies would create a company that would be positioned for the age of A.I.
The F.T.C. said that the merger would give Nvidia access to sensitive information about its rivals.
The F.T.C. said that licenses rely on Arm for support in developing, designing, testing, debugging, and maintaining their products. Arm is a neutral partner, so Arm licensees share their sensitive information with Arm. The acquisition is likely to result in a loss of trust in Arm.
An administrative trial for the lawsuit against the merger is scheduled for May 10, the agency said.
This is not a finished story. You can check back for updates.
