The US Federal Trade Commission (FTC) sued to block a $40 billion takeover bid by Nvidia for Arm, stating the deal would give the company control over designs and technology its competitors need.
Nvidia’s acquisition could stifle competition in automotive chipsets, CPU and smart network interface cards for data centre servers, the FTC claimed, noting the chip manufacturer’s rivals rely on Arm’s designs in each sector.
FTC Bureau of Competition director Holly Vedova stated it moved to “block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies”.
The regulator is also concerned over the potential for Nvidia to access proprietary information about its competitors.
It noted Nvidia’s rivals routinely share protected information with Arm as part of the process of testing and licensing its designs.
Arm is majority-owned by SoftBank Group, which put it into play to raise cash to offset steep operating losses.