FTC Launches In-Depth Probe into SoftBank's $6.5 Billion Acquisition of AI Chip Designer Ampere

FTC Initiates Second Request for Information

The Federal Trade Commission (FTC) has opened a detailed investigation into SoftBank's planned $6.5 billion acquisition of AI chip designer Ampere Computing. This probe, known as a "second request for information," suggests that the deal may undergo an extended government review 1. Such investigations are relatively rare and can last for more than a year, potentially even leading to a lawsuit blocking the acquisition 1.

SoftBank's Growing AI Chip Portfolio

Source: Economic Times

SoftBank, led by Masayoshi Son, already owns chip designer Arm, which it acquired for $32 billion in 2016 1. The addition of Ampere, founded in 2018 with a focus on cloud-native computing and recent expansion into AI chip design, would further strengthen SoftBank's position in the AI chip market. If the deal goes through, SoftBank would own Arm, UK chip designer Graphcore Ltd., and Ampere, all key players in the AI space 1.

Antitrust Concerns and Previous Challenges

The FTC's probe may be driven by potential antitrust issues arising from SoftBank's growing influence in the AI chip market. This scrutiny is reminiscent of SoftBank's previous attempt to sell Arm to NVIDIA, which was ultimately abandoned due to similar concerns 1. The AI sector has also become increasingly politicized, with projects like Stargate, in which SoftBank is heavily involved, adding to the complexity of the situation 1.

SoftBank's AI Infrastructure Strategy

Source: engadget

The acquisition of Ampere is part of SoftBank's broader strategy to ramp up its investments in artificial intelligence infrastructure 2. This move aligns with the company's other significant investments in the AI sector, including its role in leading the financing for the $500 billion Stargate data center project and its agreement to invest $32 billion in ChatGPT-maker OpenAI 2.

Ongoing Challenges for SoftBank

While pursuing its AI ambitions, SoftBank has faced several challenges in its tech investments. The Stargate project has experienced delays due to US tariffs, and its Arm division is currently embroiled in disputes with Qualcomm over chip licenses and antitrust complaints in Europe, the US, and South Korea 1. These ongoing issues add context to the FTC's scrutiny of the Ampere acquisition.

Implications for the AI Chip Market

The outcome of this FTC probe could have significant implications for the rapidly evolving AI chip market. As AI technologies continue to advance and demand for specialized chips grows, the consolidation of key players under SoftBank's umbrella may raise concerns about market competition and innovation. The investigation's results could potentially reshape the landscape of AI chip design and manufacturing in the coming years.