US regulators sue Nvidia over chipmaker’s takeover of ARM

Image copyright Getty Images Image caption Nvidia stock fell after the lawsuit was announced The US trade commission has sued Nvidia over the chipmaker’s takeover of ARM Holdings, the British chip designer. It argues…

US regulators sue Nvidia over chipmaker's takeover of ARM

Image copyright Getty Images Image caption Nvidia stock fell after the lawsuit was announced

The US trade commission has sued Nvidia over the chipmaker’s takeover of ARM Holdings, the British chip designer.

It argues that Nvidia doesn’t follow a 2007 order from the US Committee on Foreign Investment in the US (CFIUS).

Under that order, foreign companies should make investment plans for a company in question and provide more information, or it could face restrictions from CFIUS.

Nvidia has not commented on the case.

CFIUS blocked a bid by Avago to buy Broadcom and form a $117bn (£81bn) company in 2016, on concerns over spying.

Ars Technica blogged that it was “flabbergasted” at the legal action, especially as Nvidia could claim legal immunity for cooperating with CFIUS following Avago’s court defeat, and will do so anyway because it has provided “extensive consents” to CFIUS on ARM since the acquisition in 2017.

“Now CFIUS is asking them to fork over information that it didn’t ask for,” it added.

The company said in a statement that the FTC “cannot retroactively alter a three-year-old consent agreement”.

Image copyright Reuters Image caption Nvidia has been buying ARM for almost three years

“The FTC is suing Nvidia in order to distract from the fact that it has lost hundreds of millions of dollars trying to settle this matter for years,” said Nvidia’s general counsel, Art Peck.

“The request for information is broad, burdensome and inexplicable given that we have fulfilled our obligations and will continue to do so.

“We will not pay a penny to the FTC in exchange for their silence, and will continue to operate with all our resources at our disposal to serve our shareholders.”

Shareholders welcomed the move.

“This was a move which Nvidia investors had been requesting since the CFIUS review was initiated,” said Bob Djurdjevic, a shareholder in Nvidia.

“No one will lose sleep over this issue, which should be played out by the courts, not the CEO and board.”

Nvidia’s stock fell more than 9% on the news.

Leave a Comment