The FTC added the combined firm "would have the means and incentive to stifle innovative next-generation technologies, including those used to run datacenters and driver-assistance systems in cars." The FTC alleged "the proposed merger would give Nvidia the ability and incentive to use its control of this technology to undermine its competitors, reducing competition and ultimately resulting in reduced product quality, reduced innovation, higher prices, and less choice, harming the millions of Americans who benefit from Arm-based products." The FTC, which is made up of two Republicans and two Democrats, voted 4-0 to approve the challenge to the planned merger. That would be a new blow for the Japanese conglomerate whose Vision Fund assets sank by $10 billion last month, driven by plummeting valuations for investments in Chinese e-commerce firm Alibaba and ride-hailing service Didi Global Inc. 30, it is unclear whether Arm, in an IPO, would fetch anything close to the $80 billion in value offered by Nvidia. While Arm's revenue is growing briskly, rising 56.3% to $1.46 billion in the six months ended Sept. I would love to see this deal, but I don't think they need it."īefore Nvidia's offer, Softbank had planned to file for an initial public offering for Arm.
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The software narrative has become a bigger piece of the story. "The data center story has been really playing out. "Nobody thinks the deal is going to close," said Stacy Rasgon, an analyst with Bernstein. Nvidia will owe only a $1.25 billion breakup fee if the deal does not close, and its shares closed up 2.2% at $321.26 on Thursday. The stock-heavy deal has more than doubled in value since it was announced in September 2020 as Nvidia shares have risen on the performance of its data center business. Nvidia said it would "work to demonstrate that this transaction will benefit the industry and promote competition." Arm was sold to Japan's SoftBank in 2016. Arm licenses its chip architecture and blueprints to major chipmakers Apple Inc, Qualcomm Inc and Samsung Electronics Co Ltd, underpinning the global smartphone ecosystem.