FTC Antitrust Probe Targets Arm Holdings Over Chip Licensing Practices

Arm Holdings Plc (NASDAQ: ARM) is reportedly under formal investigation by the U.S. Federal Trade Commission (FTC) over concerns tied to its semiconductor licensing business, according to Bloomberg. The probe marks a significant escalation in regulatory scrutiny surrounding the UK-based chip designer as it expands deeper into the global AI and data center markets.

Sources familiar with the matter said the FTC is examining whether Arm may be using its dominant position in CPU technology licensing to gain an unfair advantage in the semiconductor industry. Regulators are reportedly focused on claims that Arm could restrict or reduce access to its proprietary chip blueprints for outside partners while simultaneously growing its own chip-development operations.

The investigation follows increasing tension between Arm and Qualcomm Inc. (NASDAQ: QCOM), one of Arm’s major customers and long-time technology partners. Qualcomm previously raised concerns with European regulators, accusing Arm of limiting access to essential technology licenses. Those complaints reportedly contributed to inspections conducted by South Korean competition authorities at Arm’s Seoul offices last year.

Neither the FTC nor Arm publicly commented on the investigation. However, Arm previously dismissed Qualcomm’s accusations, calling them “baseless” and part of a broader commercial dispute between the companies.

The regulatory pressure comes at a pivotal moment for Arm Holdings. Under CEO Rene Haas, the company recently announced plans to develop its own processors, moving beyond its traditional licensing-focused business model. Arm expects the new strategy to potentially generate up to $15 billion annually within the next five years as demand for artificial intelligence infrastructure and advanced computing continues to grow.

Major technology firms including Alphabet (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) have reportedly supported Arm’s expansion into custom chip development. Still, critics argue the strategy could weaken Arm’s historically open licensing ecosystem.

Following reports of the FTC investigation, Arm stock slipped slightly in after-hours trading, while investors continued monitoring broader semiconductor sector regulatory risks and competitive developments.