United States FTC Files Lawsuit to Block NVIDIA-Arm Acquisition
by Ryan Smith on December 2, 2021 7:45 PM EST
In the biggest roadblock yet to NVIDIA’s proposed acquisition of Arm, the United States Federal Trade Commission (FTC) has announced this afternoon that the regulatory body will be suing to block the merger. Citing concerns over the deal “stifling the innovation pipeline for next-generation technologies”, the FTC is moving to scuttle the $40 billion deal in order to protect the interests of the wider marketplace.
The deal with current Arm owner SoftBank was first announced in September of 2020, where at the time SoftBank had been shopping Arm around in an effort to either sell or spin-off the technology IP company. And while NVIDIA entered into the deal with bullish optimism about being able to close it without too much trouble, the company has since encountered greater political headwinds than expected due to the broad industry and regulatory discomfort with a single chip maker owning an IP supplier used by hundreds of other chip makers. The FTC, in turn, is the latest and most powerful regulatory body to move to investigate the deal – voting 4-0 to file the suit – following the European Union opening a probe into the merger earlier this fall. The
While the full FTC complaint has yet to be released, per a press release put out by the agency earlier today, the crux of the FTC’s concerns revolve around the advantage over other chip makers that NVIDIA would gain from owning Arm, and the potential for misconduct and other unfair acts against competitors that also rely on Arm’s IP. In particular, the FTC states that “Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals.”
To that end, the FTC’s complaint is primarily focusing on product categories where NVIDIA already sells their own Arm-based hardware. This includes Advanced Driver Assistance Systems (ADAS) for cars, Data Processing Units (DPUs) and SmartNICs, and, of course, Arm-based CPUs for servers. These are all areas where NVIDIA is an active competitor, and as the FTC believes, would provide incentive for NVIDIA to engage in unfair competition.
More interesting, perhaps, is the FTC’s final concern about the Arm acquisition: that the deal will give NVIDIA access to “competitively sensitive information of Arm’s licensees”, which NVIDIA could then abuse for their own gain. Since many of Arm’s customers/licensees are directly reliant on Arm’s core designs (as opposed to just licensing the architecture), they are also reliant on Arm to add features and make other alterations that they need for future generations of products. As a result, Arm’s customers regularly share what would be considered sensitive information with the company, which the FTC in turn believes could be abused by NVIDIA to harm rivals, such as by withholding the development of features that these rival-customers need.
NVIDIA, in turn, has announced that they will be fighting the FTC lawsuit, stating that “As we move into this next step in the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition.”
Ultimately, even if NVIDIA is successful in defending the acquisition and defeating the FTC’s lawsuit, today’s announcement means that the Arm acquisition has now been set back by at least several months. NVIDIA’s administrative trial is only scheduled to begin on August 9, 2022, almost half a year after NVIDIA initially expected the deal to close. And at this point, it’s unclear how long a trial would last – and how long it would take to render a verdict.
Source: United States Federal Trade Commission
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mode_13h - Monday, December 13, 2021 - link
> it is the middle who have hidden motive to install themselves in place of the highI think we're somewhat wired to be social-climbers. It's an intrinsic part of being social animals, and it gets back to the part about greed being somewhat innate.
> using lip service to equality and brotherhood to get the low on their side.
Feeling victimized or disadvantaged is a powerful motivator, and politicians know this. That's one of the accelerants of identity politics. And I'm not making an oblique reference to any specific group, as no group is immune to it.
That's why I think society loses, when we engage in identity politics. The more we can bring the focus back to establishing and enforcing general principles, the better we are for it.
> When I hear talk of yachts, etc., I fancy I can almost sense the
> envy of this upward-aiming group.
I think extreme wealth does have a corrosive effect on society. It's also not as good for the economy. Markets function better, when money and power don't over-concentrate.
GeoffreyA - Thursday, December 16, 2021 - link
Incidentally, today is Day of Reconciliation in SA. That's what society needs, reconciliation and love, whereas identity politics is causing more division and cementing the lines. Focusing on the 0.01% that makes us different, and sweeping under the carpet the 99.9% where we're the same. Imagine if subatomic particles had to say, "Let's engage in identity politics," matter as we know it would fall to pieces. Small wonder, society is in this state.Agreed, extreme wealth is not a nice thing, but if somebody earned it by toil and sweat, by right it belongs to him. How does society remedy that?
mode_13h - Friday, December 17, 2021 - link
> today is Day of Reconciliation in SA. That's what society needs, reconciliationThat's admirable. It would probably help.
> Focusing on the 0.01% that makes us different
I'm often struck by the irony of how fiercest conflicts are often between neighboring tribes or countries that outsiders find almost indistinguishable.
> if somebody earned it by toil and sweat, by right it belongs to him.
You can't. Not by yourself. Amassing extreme wealth depends on the work of many people, much infrastructure, standards, security, and stability. All of that comes at a cost. Taxes are the tool we have of assessing and extracting those costs.
mode_13h - Monday, December 13, 2021 - link
> The main thing we all want is fair, equal dealing.Agreed, but we must be wary that we're unreliable judges of fairness. I wish I could remember the name, but there's a psychological effect where people judge their position according to their neighbors and it leads to a skewed perception where most people feel like they're doing relatively worse than they are.
In my case, I have nothing to complain about. I'm paid more than enough to meet my needs. In fact, if I thought this were the upper end of the pay scale, I could accept it without much complaint. However, when I learn that others in my area are getting paid more for similar or even lower-grade work, I can't help but feel slightly annoyed.
Anyway, fairness is a loaded term. What some people judge to be fair (e.g. equal opportunity), might be seen as unfair to those trying to compete who are at a disadvantage. Thus, even agreeing on the general principle doesn't guarantee we'd agree on any specific policy or means of instituting it.
This is where I think having broad participation (i.e. democracy) has real potential. If you believe the system is working mostly as judged fair by the preponderance of your peers, that can lend real legitimacy to it. It's by no means a guarantee that democracy leads to a fair system, but broader participation *should* tend to make the system more fair than it'd otherwise be.
GeoffreyA - Thursday, December 16, 2021 - link
Absolutely, I think it's almost universal that we feel we're worse off than our fellows. And that leads to discontent, robbing joy from what could've been a happy life. As my dear grandmother often says, "Contentment." Sadly, people are envying other's cars, jobs, heck, even gardens! I joke not.As always, solutions are what count. I think there's much to be gained if we could apply ideas from computer science to society. In many ways, isn't society like an operating system? The problem is, programs are individual and sentient. So the question becomes, how do we reconcile these tensions, of control vs. individualism? And how do we do so in a stepped fashion? Because unlike a hard drive, we can't format a society. Democracy is the best system we've got; but I would go so far to say that anti-democratic notions can still be "emulated" on the democratic machinery. Perhaps critical mass of participation hasn't been achieved, or you've got this monolithic clumping into "AMD and Intel." A law of nature? Perhaps.
mode_13h - Friday, December 17, 2021 - link
> In many ways, isn't society like an operating system?Good questions, but I think a lot of where economists and certain ideologies have gone wrong is by treating humans as perfectly logical and always acting in their own best interest. We know humans are subject to a whole range of cognitive biases and errors, which some of us have grown very adept at exploiting -- both for political and economic gain.
> how do we reconcile these tensions, of control vs. individualism?
> And how do we do so in a stepped fashion?
This is the challenge of our age. At least, in terms of governance. We have to figure out how to fix discourse. If we can both fix discourse and increase engagement, then there's hope. Part of fixing discourse involves somehow reducing manipulation, which is a growing threat and driving the electorate towards the extremes.
> I would go so far to say that anti-democratic notions can still be "emulated"
> on the democratic machinery.
Yeah, what seems to happen is that demagogues take power and then start breaking and contorting government to enshrine themselves and increase their authority. Before you know it, you can no longer call it a democracy. Examples abound.
"The price of freedom is eternal vigilance." People forget that part. Democracy is anything but self-maintaining.
GeoffreyA - Tuesday, December 21, 2021 - link
As usual, excellent points.Some ingredient is missing from democracy. As long as the human element is present, there'll be manipulation. The game seems to be, how do I use the democratic system to install myself in power? So, instead of a tyrant who does it by force, we now use a softer, more persuasive approach. Promise a tonne of stuff, play into the notions of the demographic you're trying to win, crack some jokes, and you're well ahead. Plus, the Common Folk don't seem to know what they want, or what will truly make them happy, and are ripe for manipulation.
We discussed an AI ruling at some length before. Of course, humans aren't going to accept it, and I fear it would end up being tyrannical because its optimisation would always outweigh our attempts for democratic reform. Or human fingers might be in off-limit parts of the source code!
mode_13h - Tuesday, December 21, 2021 - link
> we now use a softer, more persuasive approach. Promise a tonne of stuff,> play into the notions of the demographic you're trying to win, crack some jokes,
> and you're well ahead.
That's the sort of thing you do if you're aiming for the center of the electorate. If you're running as a partisan or a cultural/economic warrior, then you want to seem more extreme in your views and uncompromising in your positions.
> the Common Folk don't seem to know what they want,
Really? I think most people in fact *do* know what the do/don't want. Manipulation tends to harness fear, anxiety, or moral outrage. Those tactics tend to be inexpensive, because they don't require big spending or huge government projects, once the politician is elected. The same cannot be said of appealing to their economic self-interests.
> humans aren't going to accept (an AI ruling)
The AI you really need to fear is probably one that's smart enough to put up a human front man.
GeoffreyA - Tuesday, December 21, 2021 - link
The radical character does gain quite a following, often by appealing to passion or unreason.You're right, and dug deeper than I went. Appealing to fear works natively, and is a tactic employed throughout history. Same with moral outrage. The wind blows strongly in Salem this Christmas.
As for that AI using a human front man, it is a chilling thought. I can't help picturing a ventriloquist or something like a techno-doppelganger!
mode_13h - Tuesday, December 21, 2021 - link
> I can't help picturing a ventriloquist or something like a techno-doppelganger!Or simply a vain, shallow media personality with questionable allegiances. Now, why does that sound familiar...