The US Federal Trade Commission (FTC) argued Monday that competition in nascent markets for chips in self-driving cars and a new class of networking chips could be hurt if Nvidia Corp. made an $80 billion purchase of Arm Ltd. .
Last week, the regulator said it was suing to block a deal in which the world’s most valuable publicly traded chip firm, Nvidia, is competing to buy the UK-based arm from current owner SoftBank Group Corp. Arm has licensed its computing architecture to semiconductor firms. , who use it to design chips for devices such as mobile phones.
On Monday, the FTC released a revised version of its complaint. It said it believes Nvidia’s purchase of Arm will hurt competition because hundreds of chip companies that rely on Arm are colluding with the British firm for fear of Nvidia gaining access to its product plans. would hesitate to do so.
Since the deal’s announcement, Nvidia has sought to frame its purchase as a way to make Arm a more viable competitor to the Intel Corp.-owned “x86” architecture that dominates PCs and data centers. Arm is now used in central processors for smart phones but not for data center servers.
Nvidia has argued that Intel’s x86 architecture has a 97.4% market share in data center servers, saying it will invest in Arm to make it a more viable option.
But Monday’s FTC complaint focused on new markets where Arm is dominant and where x86 is not currently used. It said rivals from Nvidia and Intel to Tesla Inc. rely primarily on Arm for emerging areas such as self-driving car chips and “data processing unit” chips: networking chips that add a layer of security to data centers.
“Nvidia will have an incentive to harm Arm-Reliant”
(self-driving chip) rivals work closely with them to help them succeed, as Arm does today, as Nvidia competes closely with these rivals for major business.
Opportunity,” wrote the FTC.
The definition of the market often plays a large role in deciding antitrust cases.
Nvidia declined to comment beyond a statement issued last week, saying it “plans to work to demonstrate that this transaction will benefit the industry and encourage competition.”
Arm executives have told Reuters that Nvidia and Arm plan to build a “firewall.” -nvidia-deal-idUSKBN26S3A1 To prevent any information shared with Arm from being used inappropriately by Nvidia.
Herbert Hovenkamp, who teaches antitrust at the University of Pennsylvania’s law school, said any firewalls created by Arm and Nvidia will probably fall short.
“Agencies hate firewalls,” he said.
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