The U.S. Federal Trade Commission is investigating Arm Holdings to determine if the semiconductor giant is using its dominant position in chip architecture to unfairly stifle competition, according to people familiar with the matter. The probe centers on whether the British company is leveraging its role as a primary licensor of processor blueprints to illegally monopolize segments of the semiconductor market.
At the heart of the Arm Holdings US antitrust probe is a fundamental shift in the company’s business model. For decades, Arm operated as a neutral provider, selling the “instruction sets”—the essential code that allows software to communicate with hardware—to nearly every major chipmaker in the world. However, regulators are now examining whether Arm is compromising that neutrality by developing its own processors, potentially creating a conflict of interest that could penalize its own customers.
The FTC is specifically looking into whether Arm has refused to grant licenses or has intentionally lowered the quality of the blueprints provided to partners while simultaneously ramping up its own internal chip development. While a spokesperson for the FTC declined to comment on the confidential inquiry, sources indicate the regulator has already demanded that Arm preserve internal documents related to these practices.
The Conflict of Interest in Chip Design
The tension stems from Arm’s historical role as the “architect” of the mobile world. Companies like Apple and Qualcomm do not invent the basic language their chips speak; they license it from Arm. This open licensing model fostered a massive ecosystem of innovation, allowing various companies to build specialized chips on a common foundation.
That relationship has soured as Arm moves toward becoming a direct competitor. Under Chief Executive Officer Rene Haas, Arm has pivoted toward the high-margin data center market, aiming to capture a larger share of the revenue generated by complex AI systems and cloud computing. The company has indicated that designing its own processors could generate as much as $15 billion annually within five years.
Qualcomm, the world’s leading maker of smartphone processors, has been one of the most vocal critics of this shift. The company contends that Arm’s move into chipmaking creates a dangerous incentive for the licensor to restrict access to the very technology that its customers rely on to survive. This friction has already spilled over into other jurisdictions, with the European Commission receiving a complaint from Qualcomm in 2024 and South Korean authorities conducting unannounced inspections of Arm’s Seoul offices in 2025.
A Global Legal War
The FTC investigation is the latest chapter in a scorched-earth legal battle between Arm and Qualcomm. The two companies have spent years locked in disputes over contract breaches and licensing fees, most notably following Qualcomm’s 2021 acquisition of Nuvia. That deal sparked a fight over whether Nuvia’s existing Arm licenses could be transferred to Qualcomm—a battle Qualcomm eventually won in court, though Arm continues to appeal the decision.
The rivalry also played a key role in blocking the 2022 attempt by Nvidia to acquire Arm. Qualcomm emerged as a primary opponent of that takeover, arguing that if the AI chip leader owned the underlying architecture, the entire semiconductor industry would be held hostage to Nvidia’s pricing and access rules.
Arm has dismissed these concerns as strategic maneuvers by its rivals. In a statement, the company described Qualcomm’s allegations of anticompetitive conduct as “nothing more than a desperate and underhanded attempt to obtain leverage in the parties’ ongoing commercial dispute for its own competitive benefit.”
Industry Divide: Who Wins and Who Loses?
While Qualcomm views Arm’s expansion as a threat, other industry titans see it as a necessary evolution. Cloud giants like Amazon and Alphabet (Google) have welcomed the prospect of more Arm-based alternatives in the data center, which could break the long-standing dominance of Intel and AMD.
Forrest Norrod, an executive for data center operations at AMD, noted that increased competition in the space keeps established players “running very fast.” Arm argues that its move into chipmaking is a direct response to customer demand for more efficient, specialized hardware that can handle the massive workloads required by generative AI.
The following table outlines the core friction points currently under regulatory review:
| Issue | Qualcomm’s Position | Arm’s Position |
|---|---|---|
| Licensing Access | Arm is withholding key tech to favor its own chips. | Licensing remains fair; expansion meets customer needs. |
| Market Role | Arm should remain a neutral architect. | Arm must evolve to capture data center value. |
| Competitive Impact | Creates an illegal monopoly over CPU blueprints. | Increases competition against Intel and AMD. |
The financial markets have remained relatively steady despite the probe. Arm shares, which are majority-owned by the SoftBank Group, saw a slight dip of less than 1% to $207.96 in late trading on May 15, though the stock has seen significant growth over the past year, outpacing the Philadelphia Stock Exchange Semiconductor Index.
Disclaimer: This report involves ongoing legal and regulatory investigations. The information provided is for informational purposes and does not constitute financial or legal advice.
The FTC’s investigation remains in the evidence-gathering stage. The next critical checkpoint will be whether the regulator moves from a confidential probe to a formal enforcement action or seeks a settlement that mandates how Arm manages its licenses while developing its own hardware.
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