FTC sues to block Nvidia's takeover of Arm

Daniel Sims

Posts: 236   +12
Staff
Why it matters: This week, The US Federal Trade Commission (FTC) sued to block Nvidia's $40 billion acquisition of Arm. The FTC says the deal would give Nvidia too much leverage over companies that rely on Arm for their technology, including Nvidia's rivals. The merger is already facing an EU antitrust investigation.

The FTC announced the suit on Thursday, citing concerns about innovation and competition as a primary reason. The Commission is worried Nvidia's control could distort Arm's incentives to its licensees and stifle innovation, specifically in areas like driver assistance systems, data center technology, and cloud computing processors. Arm licenses its chip designs to tech companies that use them for the technology in devices like smartphones, tablets, and automotive systems. They include companies like Samsung and Apple.

Another potential issue is that licensees share critical information about their products with Arm, which could flow up to Nvidia were it to acquire Arm. Aside from affecting competition and innovation, it could also damage other companies' trust in Arm's neutrality when sharing information on chip designs.

The FTC voted unanimously to go forward with the suit, with the administrative trial set for August 9, 2022. It is working closely with other competition agencies in the United Kingdom (where Arm is based), Japan (where the company that currently owns Arm is based), South Korea, and the European Union.

The EU is already investigating the deal. Nvidia indicated that it would make concessions to ensure competition if the Arm merger goes through.

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Shadowboxer

Posts: 1,980   +1,571
Normally I'm against government intervention but we can't allow nVidia to buy ARM.
Who would you rather buy ARM? Nvidia have at least promised that they would sign legal agreements preventing them from restricting licensing in any form. And most of the companies who have voiced concerns over the Nvidia - ARM acquisition have also made noises about buying ARM themselves several times. It’s going to end up with a scummy big multi billion dollar tech company one way or another. We are just seeing the corporate battle for it unfold now. Personally I think I’d prefer Nvidia to buy it over Qualcomm, Intel or MS etc. The lesser of all the evils so to say. Nvidia aren’t as rich or as powerful as the other parties involved, it would be the least monopolistic. Imagine if Intel acquired ARM, you think Apple would still get easy licensing to make their own designs? Of course Nvidia will push its graphics solutions with it. But that’s not a massive shame imo.

 

Burty117

Posts: 4,327   +2,422
Who would you rather buy ARM? Nvidia have at least promised that they would sign legal agreements preventing them from restricting licensing in any form. And most of the companies who have voiced concerns over the Nvidia - ARM acquisition have also made noises about buying ARM themselves several times. It’s going to end up with a scummy big multi billion dollar tech company one way or another. We are just seeing the corporate battle for it unfold now. Personally I think I’d prefer Nvidia to buy it over Qualcomm, Intel or MS etc. The lesser of all the evils so to say. Nvidia aren’t as rich or as powerful as the other parties involved, it would be the least monopolistic. Imagine if Intel acquired ARM, you think Apple would still get easy licensing to make their own designs? Of course Nvidia will push its graphics solutions with it. But that’s not a massive shame imo.
Does someone HAVE to buy ARM though? They're quite successful and I don't see why Nvidia would want to own them unless it was to hurt competition.

I get some massive bank or investment firm buying them up but Nvidia, Intel, MS, Apple, Samsung, AMD, they're all as bad as each other.
 

yRaz

Posts: 4,026   +4,385
Does someone HAVE to buy ARM though? They're quite successful and I don't see why Nvidia would want to own them unless it was to hurt competition.

I get some massive bank or investment firm buying them up but Nvidia, Intel, MS, Apple, Samsung, AMD, they're all as bad as each other.
Pretty much, the licensing of ARM being free to use is good for all of us. The current way ARM works is the entire reason Apples M1 chip exists. With how nVidia currently controls their intellectual property I in no way see how they would buy ARM with good intentions. Legal restrictions or not there are these things called lawyers and nVidia can afford to hire lots of them.
 
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umbala

Posts: 510   +873
This should absolutely not be allowed to go through. None of the big players like nVidia, Intel, AMD, Apple, MS, Google, etc. should be allowed anywhere near ARM. None of these companies have any reason to want ARM except to reduce competition, stifle innovation, and line their own pockets with more restrictive licensing of ARM's IP of course.
 

0dium

Posts: 301   +350
Does someone HAVE to buy ARM though? They're quite successful and I don't see why Nvidia would want to own them unless it was to hurt competition.

I get some massive bank or investment firm buying them up but Nvidia, Intel, MS, Apple, Samsung, AMD, they're all as bad as each other.
True. Any of the chipmakers should not be even close to Arm. It's in their interest to mock the competition.
 

Irata

Posts: 1,880   +3,189
This is good news. I am admittedly surprised that it‘s the FTC that‘s trying to block this deal but cudos to them.

I keep hearing the ‚but nVidia would improve ARM with their innovations‘ yet they were free to create great innovative ARM cores all along but didn‘t.
 

Burty117

Posts: 4,327   +2,422
I keep hearing the ‚but nVidia would improve ARM with their innovations‘ yet they were free to create great innovative ARM cores all along but didn‘t.
This is the thing isn't it! Nvidia have had the ability to create great ARM cores this entire time and just haven't. Apple, Qualcomm, Google, Amazon, Samsung, they all make great ARM cores, Nvidia have done but unless I missed something in the last few years, Nvidia haven't done much in this space.
They already did, ARM hasn't been British owned and has been a subsidiary for some years.
I know, You know what I meant though, the specific sale of ARM to a big tech giant is just bad news, investment firms are only after money and would want ARM to sell their licenses to as many of the big tech giants as possible. Nvidia owning ARM would want to make that harder for the rest to gain access to the tech they just paid $40 billion for.
 

Kosmoz

Posts: 547   +988
This is good news. I am admittedly surprised that it‘s the FTC that‘s trying to block this deal but cudos to them.

I keep hearing the ‚but nVidia would improve ARM with their innovations‘ yet they were free to create great innovative ARM cores all along but didn‘t.
Of course nvidia would improve AMR with their "innovations"... For their own deceitful and selfish good!
 

eforce

Posts: 637   +783
Due to the way money is created (out of thin air), consolidation of industry over time is inevitable, you can stop Nvidia now but another will eventually get them later.
 

JordLevy

Posts: 60   +29
Ideally just leave the company with Softbank or spin ARM out as an independent company. Nvidia owning ARM means that they could stifle other companies from rendering ARM tech in the future. No matter what innovations Nvidia introduces ARM, Nvidia would favor their own before anyone else.
 

Irata

Posts: 1,880   +3,189
Apple was approached but they were wise to turb away. If Apple even tried they'd have been sued for anti-competitive practices by every major nation and company on Earth.
This.
You don‘t want to be the only player - for the same reason Intel would have never allowed AMD to go under.

If you are dominating in your field, it always helps to have other players around in order to avoid unpleasant government scrutiny.
 

Sausagemeat

Posts: 1,202   +1,060
I don’t think it matters who buys ARM. At least Nvidia would legally guarantee licences. It’s not like the companies who make ARM chips need anything from ARM but the licence. I actually can’t see Nvidia being able to do much damage if they are forced to continue to sell the licences.

Reading the comments is amusing, these companies really aren’t that bad. Most of us give them their money time and time again. But I guess it’s cool to be seen hating them these days. If you really feel Intel, MS, Nvidia, AMD, Qualcomm etc are evil you would be a massive hypocrite to use anything they sell.
 

Burty117

Posts: 4,327   +2,422
Reading the comments is amusing, these companies really aren’t that bad. Most of us give them their money time and time again. But I guess it’s cool to be seen hating them these days. If you really feel Intel, MS, Nvidia, AMD, Qualcomm etc are evil you would be a massive hypocrite to use anything they sell.
The problem I have with this is, there isn't alternatives, hence why it's expected any of these companies will just make poor decisions.
 

Sausagemeat

Posts: 1,202   +1,060
The problem I have with this is, there isn't alternatives, hence why it's expected any of these companies will just make poor decisions.
I don’t think any of these companies are particularly evil at all. In fact some of these corporations are driving forward huge advances to help us fight all sorts of global problems like climate change and poor internet connectivity in the developing world. But these days it’s fashionable to be seen to hate corporations.

Don’t get me wrong, I’m an ex corporate stooge who worked with systems who gave up that life to become a scuba instructor, boat captain and commercial fisherman. But I think tech corporations are generally humane entity’s. I certainly prefer them to the governments of the UK, USA and EU at least!
 

Theinsanegamer

Posts: 3,013   +4,833
Nvidia has abused it's position as market leader so many times, and has repeatedly failed to innovate with ARM. They should not be allowed anywhere near ARM, ideally ARM needs to remain independant.
I don’t think any of these companies are particularly evil at all. In fact some of these corporations are driving forward huge advances to help us fight all sorts of global problems like climate change and poor internet connectivity in the developing world. But these days it’s fashionable to be seen to hate corporations.

Don’t get me wrong, I’m an ex corporate stooge who worked with systems who gave up that life to become a scuba instructor, boat captain and commercial fisherman. But I think tech corporations are generally humane entity’s. I certainly prefer them to the governments of the UK, USA and EU at least!
In no world are tech companies any more humane then world governments.
 

Tams80

Posts: 85   +57
Who would you rather buy ARM? Nvidia have at least promised that they would sign legal agreements preventing them from restricting licensing in any form. And most of the companies who have voiced concerns over the Nvidia - ARM acquisition have also made noises about buying ARM themselves several times. It’s going to end up with a scummy big multi billion dollar tech company one way or another. We are just seeing the corporate battle for it unfold now. Personally I think I’d prefer Nvidia to buy it over Qualcomm, Intel or MS etc. The lesser of all the evils so to say. Nvidia aren’t as rich or as powerful as the other parties involved, it would be the least monopolistic. Imagine if Intel acquired ARM, you think Apple would still get easy licensing to make their own designs? Of course Nvidia will push its graphics solutions with it. But that’s not a massive shame imo.

No one. Or for Softbank to do an IPO. Barring that, any company that isn't directly invested in and competing using Arm IP.

And that would just be for any company that uses Arm IP. This is Nvidia who have a terrible track record of locking others out (including their own customers) and ****ing others over. So much so that Apple, Microsoft and Sony all refused to work with them again. And Nintendo only did because Nvidia had aging SoCs they couldn't shift and get a good return on, so sold them to Nintendo for cheap.
 
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JordLevy

Posts: 60   +29
I don’t think any of these companies are particularly evil at all. In fact some of these corporations are driving forward huge advances to help us fight all sorts of global problems like climate change and poor internet connectivity in the developing world. But these days it’s fashionable to be seen to hate corporations.

Don’t get me wrong, I’m an ex corporate stooge who worked with systems who gave up that life to become a scuba instructor, boat captain and commercial fisherman. But I think tech corporations are generally humane entity’s. I certainly prefer them to the governments of the UK, USA and EU at least!
I am in enterprise and I generally think that most companies are fine. However if you think for one second that Nvidia wants to buy ARM "just because" then you've got a very narrow view of what large tech companies are doing atm.

I don't think that tech companies or large companies out there are evil and want to amass armies of terminators etc. etc. however they are out there looking to create advantage for themselves and disadvantages for their competitors. If you let a company buy ARM who has a pony in that race who says they won't do anything to disadvantage others, then I think that's naïve to take them at face value. The second they get the opportunity to do something to mess the competition over they will, it'd honestly bad business not to.

So for the sake of a level market, ARM needs to be spun off, they need to remain with SoftBank or they need to go to another neutral owner.
 

cliffordcooley

Posts: 13,141   +6,438
If you let a company buy ARM who has a pony in that race who says they won't do anything to disadvantage others, then I think that's naïve to take them at face value. The second they get the opportunity to do something to mess the competition over they will, it'd honestly bad business not to.
Who is to say anyone buying will do just that regardless whether they have a pony in the race.