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.
Chief Executive of Apple, Tim Cook gives a thumb’s up during a tour the Apple Headquarters on December 12, 2024 in London, England.
Chris Jackson | Getty Images
Apple has triumphed over an effort from the U.K. government to keep details secret of its appeal against an order to create a “backdoor” to iPhone users’ data.
The U.K.’s Investigatory Powers Tribunal on Monday published a ruling dismissing the government’s attempt to prevent details from a hearing on the appeal from being made public. The government had tried to keep the information secret on the grounds it posed risks to national security.
Judges Rabinder Singh and Judge Jeremy Johnson said in their ruling that the U.K. government’s request to keep details of the hearing private “would be the most fundamental interference with the principle of open justice.”
“It would have been a truly extraordinary step to conduct a hearing entirely in secret without any public revelation of the fact that a hearing was taking place,” they said.
Britain’s Home Office was not immediately available for comment when contacted by CNBC.
This backdoor would allow the government to access information secured by Apple’s Advanced Data Protection (ADP) system, which applies end-to-end encryption to a wide range of iCloud data.
Governments in the U.S., U.K. and EU have long expressed dissatisfaction with end-to-end encryption, arguing it enables criminals, terrorists and sex offenders to conceal illicit activity.
In the U.K., the Investigatory Powers Act of 2016 empowers the government to compel tech companies to weaken their encryption technologies through so-called “backdoors” — a heavily controversial policy for both the tech industry and privacy campaigners.
Apple — which is known for its pro-privacy stance — has pushed back on efforts to weaken its encryption tools, saying this would undermine its security and put users at risk.
As a result of the government’s order, Apple withdrew its ADP system for U.K. users in February. In a blog post at the time, the tech giant said it has “never built a backdoor or master key to any of our products or services and we never will.”
“We are deeply disappointed that our customers in the UK will no longer have the option to enable Advanced Data Protection (ADP), especially given the continuing rise of data breaches and other threats to customer privacy,” Apple said in the post.
“Apple remains committed to offering our users the highest level of security for their personal data and we are hopeful that we will be able to do so in the future in the United Kingdom.”
U.S. President Donald Trump’s adviser Elon Musk reacts on the day of a rally in support of a conservative state Supreme Court candidate of an April 1 election in Green Bay, Wisconsin, U.S. March 30, 2025.
Vincent Alban | Reuters
Technology stocks teetered in volatile trading Monday as President Donald Trump stood by his sweeping global tariff plans following last week’s devastating selloff.
The Magnificent Seven stocks — Nvidia, Apple, Meta Platforms, Amazon, Microsoft and Alphabet — were largely lower after briefly rallying amid a short-lived broader market attempt to stage a rebound. Stocks temporarily jumped on speculation of a possibly delay in the tariffs, but the White House later dismissed talk of a pause.
The technology sector is coming off a brutal week. The Magnificent Seven stocks collectively shed more than $1.8 trillion in market value during a two-day market selloff, while the Nasdaq Composite recorded its worst week since the onslaught of the pandemic and entered a bear market.
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Trump held firm on his aggressive global tariffs plans over the weekend, with an initial unilateral 10% tariff going into effect Saturday. Wall Street hoped for progress on negotiations between the administration and other countries or news of a possible delay in reciprocal tariffs slated for April 9.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump told reporters aboard Air Force One on Sunday night, downplaying the recent market meltdown.
Other technology stocks also looked to build on last week’s pain. Oracle and Palantir Technologies declined more than 2% each.
Some semiconductor stocks also struggled as investors fretted over potential demand destruction stemming from the tariffs. Advanced Micro Devices was last down about 4% each, while Intel declined more than 2%.
Nintendo on Wednesday unveiled details for the Switch 2. It’ll include a bigger screen and controllers and is a faster version than its predecessor, which sold more than 150 million units since its 2017 release.
The Switch 2 will hit store shelves on June 5 for $449.99, up from $300 for the original Switch. Like the first Switch, gamers will be able to use the Switch 2 as both a handheld console and hook it up to a television. Nintendo on Friday said it would delay preorders for the device following President Donald Trump’s “reciprocal tariffs.”
The device will launch with the game “Mario Kart World.” Other games comingfor the Switch 2 include “Donkey Kong Bananza,” “Street Fighter 6,” “The Duskbloods” and “Kirby Air Riders.”
Nintendo of America President Doug Bowser sat down with technology correspondent Steve Kovach in a CNBC exclusive interview after unveiling the new console’s details. Bowser touched on the technology boosts in the Switch 2, upcoming games, the future of Nintendo’s efforts in film and entertainment beyond video games, and what Trump’s new tariffs mean for console prices in the U.S.
