FTC Reviewing Nvidia ARM deal

Issue 100

As the global chip shortage continues companies throughout the United States have been doubling down on manufacturing capabilities to keep up with demand and attempt to bring prices for semiconductors back to a manageable level. Nvidia has been the leading chip manufacturer throughout the United States, reaching a stock value of $306.93 as of Friday. The global chip manufacturer has been trying to expand its influence over the past year by making semiconductor manufacturing one of the company’s top priorities. Nvidia announced a deal to take over Arm Holdings which is currently owned by SoftBank Group Corp.

The deal was announced in September of 2020 in which Nvidia was set to take over Arm for $40 billion, since then the value of the acquisition has increased to $75 billion due to growing demand for semiconductors in which the product's overall sales are expected to increase by 25.6% this year.

This acquisition has obtained significant scrutiny as the acquisition has led regulators from the Federal Trade Commission to file a lawsuit claiming that the acquisition would give Nvidia too much control over computing technology as result in limited rivalry within the industry. Nvidia has announced its plans to set up artificial intelligence within the U.K., however, regulators are concerned that the takeover would result in job loss.

The FTC has scheduled a trial for Nvidia for August of 2022 and depending on how the trial goes Arm could be spun off as a stand-alone publicly-traded company.

Source: Wall Street Journal