The US Federal Trade Commission (FTC) has sued to block Nvidia's $40bn acquisition of Arm over concerns that the combined firm would stifle competition as well as innovation in the global chip market.
The agency argues that the proposed vertical deal would give Nvidia control over the computing technology and designs that rival firms rely upon to develop their own competing chips.
The FTC's complaint goes even further though as it alleges that the combined firm would have both the means and incentive to “stifle innovative next-generation technologies” such as those that are used to run datacenters as well as the driver-assistance systems used in cars.
Director of the FTC's Bureau of Competition, Holly Vedova provided further insight on the agency's lawsuit in a press release, saying:
“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. Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals. The FTC’s lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations.”
Stifling competition
Unlike Nvidia which develops and makes its own chips for GPUs, data centers and computer-assisted driving, Softbank-owned and UK-based Arm does not supply or market finished chips or devices.
Instead, Arm creates and licenses microprocessor designs and architectures to other technology companies including Nvidia as well as its rivals. Chips made using its designs are found in a wide variety of modern computing devices from smartphones to tablets to driver-assistance systems to servers in large datacenters.
As Arm's technology enables competition between Nvidia and its competitors in several markets, the FTC's compliant alleges that the proposed merger would give Nvidia the ability to use its control of the technology to undermine its competitors and reduce competition which would ultimately lead to reduced product quality, higher prices and less choice. However, the reason the FTC is getting involved is because it believes that the merger will harm millions of Americans who benefit from Arm-based products.
We'll have to see how the lawsuit turns out but the proposed deal has also faced scrutiny from the UK's competition watchdog as well as from rival chip maker Qualcomm.
We've also featured the best business computers, best mobile workstations and best business smartphones
from TechRadar - All the latest technology news https://ift.tt/3GsD1qb
No comments:
Post a Comment