Federal Trade Commission Chair Lina Khan highlighted the soaring stock values of Nvidia (NVDA) and Arm (ARM) as evidence that preventing mergers can foster innovation.
Speaking at a conference hosted by Bloomberg and Y Combinator, Khan emphasized that the $40 billion merger’s abandonment in 2022 compelled both companies to innovate and introduce new products.
Khan views the thwarted Nvidia deal, hailed as “the largest semiconductor chip merger in history,” as a triumph in antitrust regulation. She believes it showcases that regulatory actions can foster innovation without impeding companies from achieving financial success or embracing transformative technologies like artificial intelligence.
“The trajectory of both companies following this action illustrates how organic growth and competition can drive firms to innovate further, benefiting both businesses and the public,” Khan stated.
The evidence, according to Khan, lies in the remarkable increase in their stock prices.
“Nvidia has maintained its lead in the AI chip domain with a soaring stock valuation, while Arm’s successful IPO resulted in a forward earnings multiple surpassing Nvidia’s,” Khan elaborated.
Nvidia’s proposed acquisition of Arm in 2020 faced fierce opposition from regulators worldwide, concerned about Nvidia’s potential dominance over essential computing technology. The Federal Trade Commission filed a lawsuit in late 2021, leading to the deal’s collapse within months.
Since then, Nvidia’s shares have surged, driven by the company’s leadership in AI chip development. With a market value approaching $2 trillion, Nvidia ranks among the most valuable U.S. companies.
Arm’s stock has more than doubled since its IPO in August 2023, reflecting investor optimism in its pivotal role in AI software development. With a market capitalization exceeding $143 billion, Arm’s future growth prospects appear robust.
Representatives for Nvidia and Arm declined to provide comments on the matter.
