ARM (ARM.US) is facing an antitrust investigation in the United States due to its chip licensing practices, causing its stock price to plummet.

According to reports, Arm (ARM.US) is facing an antitrust investigation in the United States, with the investigation focusing on whether the company, leveraging its dominant position in chip licensing, has suppressed competition from rivals in the process of expanding its self-developed chip business. The Federal Trade Commission (FTC) is investigating whether Arm has engaged in behavior that restricts or diminishes competitors' access to core processor technology while growing its own chip business. Investigators have reportedly requested the company to preserve documents related to the investigation. As the global chip industry experiences the winds of AI, this investigation has brought Arm's business model under increasingly strict global regulatory scrutiny. For investors, this investigation highlights the escalating regulatory risks faced by Arm, one of the most important technology suppliers in the semiconductor industry. Regulatory constraints on Arm's chip licensing model may affect major chip manufacturers and device makers that rely on its architecture, including Qualcomm (QCOM.US) and Apple Inc. (AAPL.US). Affected by this news, Arm plummeted 8% last Friday. However, driven by the demand for AI chips, its stock price has nearly doubled so far this year. Owned by SoftBank Group, Arm has traditionally focused on chip design and processor instruction set licensing rather than manufacturing chips itself. But recently, Arm has heavily invested in developing more complete processor products, raising concerns among some customers and competitors who fear that Arm may directly compete with companies that rely on its technology. Qualcomm has been one of the most vocal critics. Disputes between the two companies can be traced back several years, and escalated after Qualcomm's acquisition of startup Nuvia in 2021, ultimately leading to a lawsuit over Arm's licensing rights. Qualcomm ultimately won the case, but Arm has appealed some aspects of the case. Regulatory authorities in Europe and South Korea have previously examined complaints related to Arm's licensing practices. Qualcomm had accused Arm of attempting to restrict technology access and alter longstanding licensing agreements to grab more semiconductor market share. Arm denies any wrongdoing and argues that Qualcomm's complaints stem from broader commercial disputes between the two companies. Under the leadership of CEO Rene Haas, Arm has expanded from the traditional smartphone sector to the infrastructure and artificial intelligence computing market, and has started to compete more directly with established processor manufacturers such as Intel Corporation (INTC.US) and AMD (AMD.US). Arm stated that the rapidly growing AI server market is becoming increasingly competitive, with industry customers in urgent need of more technology solution choices.