Nvidia’s (NASDAQ:NVDA) $40 billion acquisition of Arm was never a sure thing, and according to Gartner semiconductor analyst Alan Priestly, now seems increasingly unlikely to go through.
Regulators have been paying close attention to the deal, which faces a growing number of concerns from the UK, the EU, the US, and China.
The prospects of a single firm taking control of the vast library of intellectual property that underpins much of the wireless and computing ecosystem were always sure to draw opposition from rivals.
This idea also seems politically perilous.
On Thursday, the U.S. Federal Trade Commission (FTC) sued to block Nvidia’s planned acquisition of chip technology provider Arm, adding to the already significant challenges of the deal.
The U.K. government announced in November that it wants a complete investigation into the takeover of the firm based in Cambridge. Meanwhile, the European Commission also launched an in-depth investigation into the deal in October.
The FTC’s lawsuit alleges the acquisition would give unlawful control over computing technology and designs that rivals need to develop competing chips.
Moreover, if the deal was allowed, the firm could stifle next-generation technologies, including ones used to run data centers and driver-assistance in cars.
In turn, Nvidia has argued that the deal would lead to more innovation and that Arm will benefit from increased investment. The firm said in a statement that “we will continue to work to demonstrate that this transaction will benefit the industry and promote competition."
Based in Santa Clara, Nvidia is one of the world’s largest makers of graphics processing units (GPUs) and plays a critical role in advanced computing applications. It announced its plans to buy Arm, owned by Tokyo-based SoftBank Group, in September 2020.
Shares of Nivida closed up 2.2% Thursday at $321.26, while shares of Softbank group fell to as low as 3% on Friday.
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