Microsoft-Activision ruling highlights Lina Khan’s struggles to fight tech
FTC Chair Lina Khan testifies during the House Energy and Commerce Subcommittee on Innovation, Data and Commerce hearing titled Oversight of the Securities and Exchange Commission, in Rayburn Building, April 18, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images
When a federal judge on Tuesday decided to reject the Federal Trade Commission’s request for a preliminary injunction to prevent Microsoft from completing its acquisition of Activision Blizzard, she also rejected FTC Chair Lina Khan’s vision of antitrust enforcement.
While the judge’s ruling doesn’t mean the deal is totally in the clear, since the FTC can appeal and the U.K.’s competition enforcer has also opposed the deal, it’s indicative of the existential challenge Khan’s enforcement strategy faces in the courts.
Fighting the $68.7 billion deal has been one of the FTC’s biggest swings yet under Khan, who President Joe Biden named chair in 2021. Khan first emerged in antitrust circles for her critiques of how antitrust enforcement overlooked potential abuses by Amazon.
But even as many in Congress have become more open to a different view of antitrust in the digital age, the courts still pose a major hurdle to newer theories about how online companies can amass and leverage power to stifle rivals.
Judge Jacqueline Scott Corley wrote that the FTC had not shown it was likely to prevail in its administrative challenge of the merger in its internal proceeding, based on the agency’s view that the deal is likely to substantially lessen competition. The FTC has argued that Microsoft might make some of its games exclusive to its own game consoles or diminish the experience of Activision games on rival services should the deal close. Microsoft has said it would instead make the games more widely available.
Corley agreed with Microsoft’s view.
“To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content,” she wrote.
She added that, “Despite the completion of extensive discovery in the FTC administrative proceeding, including production of nearly 1 million documents and 30 depositions, the FTC has not identified a single document which contradicts Microsoft’s publicly-stated commitment to make Call of Duty available on PlayStation (and Nintendo Switch).”
The ruling means the parties are closer to being able to complete their merger by their July 18 deadline. But the FTC can still appeal, and the companies must still contend with the U.K. Competition and Markets Authority’s opposition to the deal.
“We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles,” an FTC spokesperson said in a statement. “In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”
It’s not the first time a judge has looked dubiously on the FTC’s antitrust enforcement theories under Khan. A federal judge also ruled against the FTC’s attempt to block Meta’s acquisition of virtual reality fitness app maker Within Unlimited, which the agency argued may lessen competition in a nascent market.
Khan has continued to bring cases against tech companies that will face similar hurdles in the courts. The most notable might be the agency’s expected challenge of Amazon’s antitrust practices.
Khan’s defenders quickly critiqued Corley’s decision. Matt Stoller, director of research at the American Economic Liberties Project, wrote on Twitter that Corley “changed the law” in writing that “the FTC must show the merger will probably substantially lessen competition.” Stoller noted that the relevant merger law says the government must show “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.”
“[W]hen a Biden judge – whose son works at Microsoft — lets the biggest tech merger of all time go through, we have a serious problem with the judiciary,” Stoller wrote. Corley disclosed her son’s job, which is not in the gaming division, at a hearing in June.
Regardless of the critiques, the ruling is another example of a judge who is unconvinced of Khan’s theories of how a tech company can leverage acquisitions in adjacent markets to harm competition. That’s the case even when the judge was appointed by the same president who named Khan to the FTC.
With new digital competition laws stalled in Congress, overcoming judges’ skepticism about newer theories on the application of existing laws will likely remain enforcers’ greatest challenge.
WATCH: Judge denies FTC request for preliminary injunction to stop Microsoft-Activision deal
Jensen Huang, chief executive officer of Nvidia Corp., during the US-Saudi Investment Forum at the Kennedy Center in Washington, DC, US, on Wednesday, Nov. 19, 2025.
Stefani Reynolds | Bloomberg | Getty Images
In the weeks leading up to Nvidia’s third-quarter earnings report, investors debated whether the markets were in an AI bubble, fretting over the massive sums being committed to building data centers and whether they could provide a long-term return on investment.
During Wednesday’s earnings call with analysts, Nvidia CEO Jensen Huang began his comments by rejecting that premise.
“There’s been a lot of talk about an AI bubble,” Huang said. “From our vantage point we see something very different.”
In many respects, Huang’s remarks are to be expected. He’s leading the company at the heart of the artificial intelligence boom, and has built its market cap to $4.5 trillion because of soaring demand for Nvidia’s graphics processing units.
Huang’s smackdown of bubble talk matters because Nvidia counts every major cloud provider — Amazon, Microsoft, Google, and Oracle — as a customer. Most of the major AI model developers, including OpenAI, Anthropic, xAI and Meta, are also big buyers of Nvidia GPUs.
Huang has deep visibility into the market, and on the call he offered a three-pronged argument for why we’re not in a bubble.
First, he said that areas like data processing, ad recommendations, search systems, and engineering, are turning to GPUs because they need the AI. That means older computing infrastructure based around the central processor will transition to new systems running on Nvidia’s chips.
Second, Huang said, AI isn’t just being integrated into current applications, but it will enable entirely new ones.
Finally, according to Huang, “agentic AI,” or applications that can run without significant input from the user, will be able to reason and plan, and will require even more computing power.
In making the case of Nvidia, Huang said it’s the only company that can address the three use cases.
“As you consider infrastructure investments, consider these three fundamental dynamics,” Huang said. “Each will contribute to infrastructure growth in the coming years.”
Reversing the slide
In its earnings release, Nvidia reported revenue and profit that sailed past estimates and issued better-than-expected guidance. Last month, Huang provided a $500 billion forecast for sales of the company’s AI chips over calendar 2025 and 2026.
The company said on Wednesday that its order backlog didn’t even include a few recent deals, like an agreement with Anthropic that was announced this week or the expansion of a deal with Saudi Arabia.
“The number will grow,” CFO Colette Kress said on the call, saying the company was on track to hit the forecast.
Prior to Wednesday’s results, Nvidia shares were down about 8% this month. Other stocks tied to the AI have gotten hit even harder, with CoreWeave plunging 44% in November, Oracle dropping 14% and Palantir falling 17%.
Some of the worry on Wall Street has been tied to the debt that certain companies have used to finance their infrastructure buildouts.
“Our customers’ financing is up to them,” Huang said.
Specific to Nvidia, investors have raised concerns in recent weeks about how much of the company’s sales were going to a small number of hyperscalers.
Last month, Microsoft, Meta, Amazon and Alphabet all lifted their forecasts for capital expenditures due to their AI buildouts, and now collectively expect to spend more than $380 billion this year.
Huang said that even without a new business model, Nvidia’s chips boost hyperscaler revenue, because they power recommendation systems for short videos, books, and ads.
People will soon start appreciating what’s happening underneath the surface of the AI boom, Huang said, versus “the simplistic view of what’s happening to capex and investment.”
WATCH: Nvidia posts Q3 beat
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