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FTC sues to block Nvidia’s $40 billion takeover of Arm

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The lawsuit threatens to sink the world’s largest semiconductor fusion, which has already been the subject of regulatory oversight.

“Semiconductor chips power the computers and technologies that are essential to our modern economy and society,” the FTC said in a statement. statement. According to his complaint, “the combined company would have the means and incentives to stifle innovative next-generation technologies, including those used to operate data centers and driver assistance systems in cars.”
Nvidia (NVDA) announced the deal to buy Arm from the Japanese technology investment company SoftBank (SFTBF) in September last year, saying at the time that he expected the deal to close in 18 months. But the merger has been subject to global regulatory scrutiny, including since China as well as the United Kingdom, where it has its headquarters in Arm. The European Commission also launched an investigation into the deal just over a month ago.

“We will continue to work to demonstrate that this transaction will benefit the industry and promote competition,” an Nvidia spokesman said in a statement. “Nvidia is committed to preserving Arm’s open license model and ensuring that its IP is available to all interested, current and future licensees.”

Arm and SoftBank did not immediately respond to requests for comment.

The FTC said Thursday it “cooperated closely with … competition agencies in the European Union, the United Kingdom, Japan and South Korea.” The trial is set to begin on August 9 next year, according to the agency.

The FTC is expected to take a tougher stance on antitrust and competition infringements, especially in the tech industry, under its newly appointed president and prominent Big Tech critic. Lina Khan. Earlier this year, the agency reversed a set of restrictions on how officials could file cases against competition offenders, which may make it easier to prosecute companies such as Amazon (AMZN).

Arm designs chips used by Apple and other major smartphone makers. The company is headquartered in Cambridge and is known as one of the most successful technology companies in the UK.

The hurdle to the merger comes amid a major one shortage of computer chips around the world, affecting the availability of everything smartphones a game consoles even cars.

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