Nvidia's acquisition of ARM is once again blocked! 40 billion US dollars in transactions to be pornographic?

On December 2, U.S. local time, the U.S. Federal Trade Commission (FTC) filed a lawsuit on antitrust grounds to block Nvidia’s US$40 billion acquisition of British chip design company ARM from Japan’s SoftBank Group. The administrative trial is scheduled for August 2022. Launched on 9th.

The FTC stated in a statement: "The proposed transaction will give Nvidia the ability and incentive to use its control of ARM technology to weaken competitors and reduce competition, ultimately leading to lower product quality, reduced innovation, higher prices, and fewer choices."

Statement by Holly Widova, Director of the Competition Bureau of the Federal Trade Commission

According to the FTC's complaint, the acquisition will damage Nvidia's three global markets for ARM-based products: advanced driver assistance systems for automobiles; smart network card DPUs for improving the security and efficiency of data center servers; and cloud computing service providers The ARM-based CPU.

In September 2020, Nvidia and SoftBank Group reached an agreement that Nvidia will acquire ARM from SoftBank, with a transaction value of approximately US$40 billion. The transaction has been approved by the boards of directors of Nvidia, SoftBank and ARM, but still requires regulatory approvals from the United Kingdom, the European Union and the United States.

global review industry opposes

The European Commission announced in October that it had launched an "in-depth investigation" into Nvidia's acquisition of ARM. The agency’s executive vice chairman Margrethe Vestager said in a statement: “Although ARM and Nvidia do not directly compete, ARM’s intellectual property rights are comparable to those of Nvidia in fields such as data centers, automobiles, and the Internet of Things. An important asset for competition. Our analysis shows that Nvidia’s acquisition of ARM may result in limited access to the latter’s intellectual property rights, causing distortion effects in many semiconductor markets."

November 16. The Minister of Digital, Culture, Media and Sports, Nadine Dorries, has ordered the UK Competition and Markets Authority (CMA) to initiate the second phase of the investigation on the grounds of national security and competition issues. In the first phase of the investigation, CMA believes that the merger and acquisition case has increased the possibility of'significantly weakened competition in four key markets,' which are data centers, the Internet of Things, the automotive industry, and gaming applications.

In addition, Google, Apple, Huawei, Qualcomm, Amazon, Tesla, Samsung Electronics, ZTE and other industry giants have been publicly opposed to Nvidia's acquisition of ARM.

ARM has its own words

ARM CEO Simon Segars stated in June this year that this merger can combine Nvidia's advantages in GPU and ARM in CPUs to develop new AI artificial intelligence chips.

Arm’s co-founder Herman objected: “One of the basic pillars of ARM’s business model is that it can be sold to anyone. SoftBank is not a chip company, so it maintains ARM’s neutrality. Most of ARM’s authorized companies are It is a competitor of Nvidia. If it becomes part of Nvidia, they will definitely look for a substitute for ARM."

Previously, Nvidia had stated that it expected the ARM transaction to be completed in March 2022. However, Nvidia CEO Huang Renxun admitted in August that the regulatory review may take longer than the company’s initial estimate of 18 months, but he said: “We are confident in completing this transaction, and we believe that regulators should recognize the acquisition’s benefit."

The deadline for NVIDIA's acquisition of ARM is approaching. According to the current acquisition process, Nvidia will lose USD 1.25 billion in advance payments, equivalent to RMB 8 billion.

Next, the FTC will work closely with competition authorities in the European Union, the United Kingdom, Japan and South Korea to conduct in-depth investigations of the acquisition.

We will continue to monitor the follow-up progress of this acquisition.

You are welcome to leave a message in the comment area if you have any thoughts on this acquisition.

FTC statement link: https://www.ftc.gov/news-events/press-releases/2021/12/ftc-sues-block-40-billion-semiconductor-chip-merger