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FTC sues to stop Nvidia’s $40bn Arm purchase

Things aren’t looking so good for the deal now

The US Federal Trade Commission has filed a lawsuit against hardware giant Nvidia related to its proposed $40 billion acquisition of chip designer Arm.

In a post on its website, the government organisation said that the merger would give Nvidia too much power within the market, resulting in harming its competitors.

“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,” FTC Bureau of Competition director, Holly Vedova, said.

“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.”

The $40 billion acquisition was announced in September 2020 with competition authorities around the world looking into the deal. The UK’s Competition and Markets Authority recently launched a six-month investigation into the matter.

This news also comes just days after the UK’s Competition and Markets Authority (CMA) instructed Facebook to sell Giphy to maintain competition between social media platforms.

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