Federal Trade Commission Chair Lina Khan speaks during the New York Times annual DealBook Summit in New York City on Nov. 29, 2023.
Michael M. Santiago | Getty Images
Federal Trade Commission Chair Lina Khan cited the surging stock prices of Nvidia and Arm as an example of how blocking mergers can lead to increased innovation.
The remarks suggest Khan and the FTC see the blocked Nvidia deal, which Khan said would have been “the largest semiconductor chip merger in history,” as an example of a successful antitrust action that doesn’t hamper companies from pursuing financial success or embracing new technologies such as artificial intelligence.
“The trajectories of both companies in the wake of this action has illustrated how organic growth and competition can spur firms to further innovate in ways that benefit the business and public alike,” Khan said at the conference.
The evidence, Khan said, is in the company stock prices.
“Not only has Nvidia remained the leading AI chipmaker in the AI chip arms race, with a surging stock valuation, but Arm ended up going public and has a forward earnings multiple that is more than double Nvidia’s,” Khan said.
In September 2020, Nvidia announced plans to acquire Arm for $40 billion in cash and stock. Both firms hailed the deal as a way to create the premier computing company for the “age of AI.“
But the acquisition quickly met resistance from regulators in the U.S., Europe and Asia. Arm’s core technology, its instruction set architecture, is used by companies such as Apple, Google and Qualcomm to build processors. Arm is often described as a “neutral supplier” that doesn’t compete with its customers.
Those companies and regulators worried that Nvidia could control access to Arm’s architecture, giving it the power to foreclose access to a key input needed to make their chips. Nvidia said it would invest in Arm and allow other companies continued use of Arm’s chip designs, preserving the company’s licensing model.
The FTC sued in late 2021 to block the merger, and in combination with pressure with other regulatory challenges, the deal collapsed less than three months later.
“Our team determined that giving one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips would be bad for competition and hamstring innovation of next-generation technology,” Khan said Tuesday.
Nvidia shares have rocketed since the deal was called off as the company has established a leading position in AI chips. Nvidia’s value has nearly tripled mostly on the strength of sales of its AI chips for servers such as the A100 and H100. It’s now worth just under $2 trillion, the third-most valuable U.S. company.
Arm stock has more than doubled since the company went public in August 2023, although SoftBank still owns 90% of the company’s shares. Investors have bid up its share price in the hope that its technology will be essential for developing and deploying AI software.
Arm is now worth more than $143 billion, and, as Khan noted, investors have given the company a high earnings multiple, suggesting that they see strong growth in the company’s future.
Representatives for Nvidia and Arm declined to comment.
Nvidia CEO Jensen Huang attends a roundtable discussion at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris on June 11, 2025.
Sarah Meyssonnier | Reuters
Nvidia announced Tuesday that it hopes to resume sales of its H20 general processing units to clients in China, saying that the U.S. government had assured the company would be granted licenses.
Nvidia’s sales of the H20 chips, which had been designed specifically to keep them out of export controls on China, were halted in April.
“The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said in a statement.
This comes against the backdrop of a preliminary trade deal between Washington and Beijing last month that sought China to resume rare earth exports and the U.S. to relax tech export controls.
Nvidia CEO Jensen Huang in recent months has ramped up his lobbying against export controls, arguing that they inhibited American tech leadership. In May, Huang said chip restrictions had already cut Nvidia’s China market share nearly in half.
Huang also announced a new “fully compliant” GPU, NVIDIA RTX PRO, saying it was ideal for smart factories and logistics.
The potential change in U.S. stance follows a meeting between Huang and U.S. President Donald Trump last week.
In his meeting with Trump and U.S. policymakers, Huang had reaffirmed Nvidia’s support for the administration’s job creation and onshoring efforts, as well as the aim for America to lead in global AI, the company said.
Meanwhile, in Beijing, it was confirmed that Huang has met with government and industry officials to discuss the benefits of AI and ways for researchers to advance safe and secure AI for the benefit of all.
In this photo illustration, a man seen holding a smartphone with the logo of US artificial intelligence company Cognition AI Inc. in front of website.
Timon Schneider | SOPA Images | Sipa USA | AP
Artificial intelligence startup Cognition announced it’s acquiring Windsurf, the AI coding company that lost its CEO and several other senior employees to Google just days earlier.
Cognition said on Monday that it will purchase Windsurf’s intellectual property, product, trademark, brand and talent, but didn’t disclose terms of the deal. It’s the latest development in an AI talent war, as companies like Meta, Google and OpenAI fiercely compete for top engineers and researchers.
OpenAI had been in talks to acquire Windsurf for about $3 billion in April, but the deal fell apart, and Google said on Friday that it hired Windsurf’s co-founder and CEO Varun Mohan. Google is paying $2.4 billion in licensing fees and for compensation, as CNBC previously reported.
“Every new employee of Cognition will be treated the same way as existing employees: with transparency, fairness, and deep respect for their abilities and value,” Cognition CEO Scott Wu wrote in a memo to employees on Monday. “After today, our efforts will be as a united and aligned team. There’s only one boat and we’re all in it together.”
Cognition didn’t immediately respond to CNBC’s request for comment. Windsurf directed CNBC to Cognition.
Cognition is best known for its AI coding agent named Devin, which is designed to help engineers build software faster. As of March, the startup had raised hundreds of millions of dollars at a valuation of close to $4 billion, according to a report from Bloomberg.
Both companies are backed by Peter Thiel’s Founders Fund. Other investors in Windsurf include Greenoaks, Kleiner Perkins and General Catalyst.
“I’m overwhelmed with excitement and optimism, but most of all, gratitude,” Jeff Wang, the interim CEO of Windsurf, wrote in a post on X on Monday. “Trying times reveal character, and I couldn’t be prouder of how every single person at Windsurf showed up these last three days for each other and for our users.”
Wu said that the acquisition ensures all Windsurf employees are “treated with respect and well taken care of in this transaction.” All employees will participate financially in the deal, have vesting cliffs waived for their work to date and receive fully accelerated vesting for their, according to the memo.
“There’s never been a more exciting time to build,” Wu wrote.
The Grok logo is being displayed on a smartphone with Xai visible in the background in this photo illustration on April 1, 2024.
Jonathan Raa | Nurphoto | Getty Images
The European Union on Monday called in representatives from Elon Musk‘s xAI after the company’s social network X, and chatbot Grok, generated and spread anti-semitic hate speech, including praise for Adolf Hitler, last week.
A spokesperson for the European Commission told CNBC via e-mail that a technical meeting will take place on Tuesday.
xAI did not immediately respond to a request for comment.
Sandro Gozi, a member of Italy’s parliament and member of the Renew Europe group, last week urged the Commission to hold a formal inquiry.
“The case raises serious concerns about compliance with the Digital Services Act (DSA) as well as the governance of generative AI in the Union’s digital space,” Gozi wrote.
X was already under a Commission probe for possible violations of the DSA.
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Grok also generated and spread offensive posts about political leaders in Poland and Turkey, including Polish Prime Minister Donald Tusk and Turkish President Recep Erdogan.
Over the weekend, xAI posted a statement apologizing for the hateful content.
“First off, we deeply apologize for the horrific behavior that many experienced. … After careful investigation, we discovered the root cause was an update to a code path upstream of the @grok bot,” the company said in the statement.
Musk and his xAI team launched a new version of Grok Wednesday night amid the backlash. Musk called it “the smartest AI in the world.”
xAI works with other businesses run and largely owned by Musk, including Tesla, the publicly traded automaker, and SpaceX, the U.S. aerospace and defense contractor.
Despite Grok’s recent outburst of hate speech, the U.S. Department of Defense awarded xAI a $200 million contract to develop AI. Anthropic, Google and OpenAI also received AI contracts.