SoftBank's Ampere Gamble: Can It Survive the FTC's Antitrust Crosshairs?

The $6.5 billion acquisition of Ampere Computing by SoftBank Group (SFTBY) has thrust the Japanese conglomerate into the heart of one of the most contentious antitrust battles in the semiconductor sector. The Federal Trade Commission's (FTC) second request for information—a rare and ominous signal—has now cast a shadow over the deal, raising critical questions about SoftBank's ambitions in AI infrastructure and the broader regulatory landscape for tech consolidation. For investors, the stakes couldn't be higher: SoftBank's stock hinges on navigating this regulatory minefield, while rivals like NVIDIA (NVDA) and AMD (AMD) could emerge as beneficiaries of the FTC's push to preserve competition.

The Regulatory Crossroads: Why the FTC's Second Request Matters

A second request is no mere formality. When the FTC invokes this tool, it's signaling a serious antitrust probe that could delay the deal for over a year—and potentially block it entirely. The Ampere acquisition is no ordinary merger; it's a bid to consolidate control over two pillars of the AI era: SoftBank's 83% stake in Arm Holdings, the British semiconductor design firm, and Ampere's cutting-edge AI processors, which rely on Arm's architectures.

The FTC's concerns are clear: SoftBank's growing dominance threatens to strangle competition in next-gen chip markets. Ampere's high-performance, energy-efficient servers are critical for data centers and AI workloads, while Arm's neutral licensing model has long been the “Switzerland” of semiconductors—used by thousands of companies, including SoftBank's rivals. The merger would concentrate this power in a single entity, giving SoftBank the ability to control access to foundational chip designs and, potentially, stifle rivals in markets like advanced driver-assistance systems (ADAS), cloud computing CPUs, and DPU SmartNICs.

SoftBank's stock has already reacted nervously. Shares have dipped 15% since the FTC's probe intensified in April, reflecting investor anxiety over regulatory overreach and the potential for a drawn-out battle.

The Antitrust Risks: A Recipe for Regulatory Headwinds

The FTC's objections mirror its stance in the failed NVIDIA-Arm deal, which was abandoned in 2022 after similar antitrust concerns. Here's why Ampere poses comparable risks:

1. Control Over Critical Infrastructure: Ampere's processors are built on Arm's designs, and the FTC fears SoftBank could weaponize its control over Arm's licensing to favor its own products. Competitors in AI, automotive, and cloud computing—reliant on Arm's neutral ecosystem—could face unfair barriers.

2. Market Dominance in Strategic Sectors: The FTC has identified three markets where the merger could eliminate competition:

3. High-Level ADAS: Automakers depend on Arm-based chips for advanced safety systems.
4. DPU SmartNICs: These datacenter chips are vital for hyperscalers like AWS and Microsoft.

5. Cloud CPUs: Ampere's energy-efficient designs are key for cloud providers.

6. Loss of Innovation Trust: Licensees may withhold critical data from Arm if they fear it could be shared with SoftBank's subsidiaries. This trust erosion could slow the pace of semiconductor innovation, hurting everyone from startups to hyperscalers.

Investment Implications: A Double-Edged Sword for Tech Investors

SoftBank's Stock: Proceed with Caution
The FTC's timeline is a critical wildcard. If delays stretch into 2026, SoftBank's valuation—already stretched by its Vision Fund's risky bets—could suffer further. The company's AI ambitions, including its Stargate supercomputer project, hinge on Ampere's technology. A blocked deal could force SoftBank to pivot, but its track record in turning around underperforming assets (like WeWork) offers little reassurance.

Rival Chipmakers: The Antitrust Winners
The FTC's scrutiny creates a golden opportunity for competitors whose chips don't rely on SoftBank's ecosystem. NVIDIA (NVDA), despite its own regulatory scars, remains a prime beneficiary. Its H100 GPUs dominate AI training workloads, and its $6.8B acquisition of Mellanox (now part of its data-center business) underscores its strength in the infrastructure race.

AMD (AMD), too, stands to gain. Its EPYC CPUs and Instinct GPUs are direct rivals to Ampere's server chips, and its open architecture avoids the centralized control risks tied to Arm.

Strategic Playbook for AI Infrastructure Investors

1. Avoid Overexposure to SoftBank Until Clarity: Hold no more than 5% of a portfolio in SFTBY until the FTC's stance crystallizes.
2. Double Down on NVIDIA and AMD: Both companies are well-positioned to capitalize on SoftBank's regulatory struggles. NVIDIA's AI-software stack (like its partnership with Microsoft's Azure) and AMD's expanding data-center footprint offer durable growth.
3. Watch for Catalysts: Key dates include the FTC's decision on whether to litigate (expected by late 2025) and CFIUS's national security review.

Conclusion: The FTC's New Era of Tech Scrutiny

The Ampere deal isn't just about SoftBank—it's a bellwether for how regulators will treat vertical mergers in the AI era. If the FTC succeeds in blocking this transaction, it will send a clear message: No company can monopolize the building blocks of tomorrow's tech.

For investors, the path forward is clear: Proceed with caution on SoftBank, but embrace the winners of open, competitive markets. The AI infrastructure boom isn't slowing, but its winners will increasingly be those unshackled by regulatory baggage.

Final Take:
- SoftBank (SFTBY): Hold for now, but prepare for volatility.
- NVIDIA (NVDA) and AMD (AMD): Core long positions in tech portfolios.
- Regulatory clarity: The ultimate catalyst—watch for it closely.