On January 18^th, Microsoft agreed to acquire Activision Blizzard in a deal valued at $68.7 billion. If Microsoft completes the deal, it will move from the fourth to the third largest video game company, trailing Sony and Tencent. This acquisition, expected to be completed by July 2023, would be Microsoft’s and the video game industry’s largest deal – ever. The move continues a string of other video game studio acquisitions by Microsoft in recent years, most notably the purchase of ZeniMax Media for $7.5 billion and Mojang for $2.5 billion. The Activision purchase stands out, though, due to the transaction’s cost and the impact it could potentially have on both Microsoft and the industry.

Microsoft’s proposed acquisition of Activision synergizes well with its video game division’s current focus: Game Pass. The subscription service lets its subscribers access an extensive catalog of games for $14.99 a month, and one of the key drivers in the growth of Game Pass has been the breadth and variety of its catalog. Recognizing this, Microsoft has constantly looked to expand that list, and the service currently offers its 25 million subscribers over 1,000 titles to play. Microsoft believes that adding Activision’s many popular game series like “Call of Duty” and “Overwatch” will further bolster that catalog.

Microsoft also views this purchase as a way to move into the “metaverse.” During Microsoft’s media call announcing the acquisition, Microsoft CEO Satya Nadella emphasized the importance of the metaverse in Microsoft’s plans for their video game division. Satya said, “we believe there won’t be a single centralized metaverse…we need to support many metaverse platforms.” The acquisition of Activision could be a useful part of this plan. Activision’s game “World of Warcraft” already has some metaverse traits like making avatars and interacting with other players in a virtual environment. How exactly this will manifest is unclear, as the metaverse is still in its infancy, but Microsoft thinks there is something worth investing billions here.

Despite the advantages of this acquisition for Microsoft, it comes with two substantial challenges: antitrust concerns and reforming one of the most maligned work cultures in the industry. On the same day that Microsoft and Activision announced the deal, the Justice Department and Federal Trade Commission announced a review on how they approve mergers and acquisitions. This announcement comes as lawmakers and regulators have promised to try and curtail the power of the tech giants. The vertical merger of Microsoft and Activision will surely catch the eye of regulators, who have thus far declined to comment.

While it is still unclear how this regulatory battle will unfold, it seems likely that they will approve the deal. The transaction cost may attract attention, but it is not enough to find the acquisition anticompetitive. And, crucially, the purchase would still see Microsoft behind competitors Sony and Tencent. Microsoft can argue that this deal will allow them to better compete with these rivals. Furthermore, Microsoft’s CEO of Gaming, Phil Spencer, tweeted the company’s intention to keep the popular franchise “Call of Duty” on Sony’s PlayStation. This is a smart move to help prevent concerns about title exclusivity, a common feature of the video game industry that has anti-competitive effects. While regulatory approval is a concern, it’s unlikely that the greatest challenge facing this acquisition will be antitrust claims; the greatest challenge is far more likely to come from rehabilitating Activision’s corporate culture.

Microsoft will be acquiring a company that is still reeling from a litany of sexual harassment and gender-pay disparity allegations. Reports state that Activision executives, including CEO Bobby Kotick, ignored claims of sexual harassment and discrimination allegedly committed by members of the managerial staff. Claims that crimes as significant as rape were hidden from Directors have led to subpoenas by the SEC to investigate further. These allegations have weighed heavily on the company’s stock, which dropped 27% as the investigations escalated. While the impact of these scandals likely provided the opportunity for Microsoft to target Activision, whether or not Microsoft remedies these problems will be a substantial factor in the acquisition’s success or failure.

While it will be a challenge, Microsoft seems to have the leadership culture to help fix Activision’s cultural problems. Current Microsoft CEO Satya Nadella is credited with changing Microsoft’s combative culture into a collaborative and inclusive environment. Furthermore, responding to complaints by Activision employees seeking more female representation in leadership, Microsoft made it a point to showcase that half of their video game division’s senior leadership positions are led by women during the deal’s announcement.

Whether Microsoft can reform the cultural problem at Activision will be of massive importance. While the future is very much uncertain, Microsoft’s latest move has the potential to impact the video game industry forever.

Fundamental civil rights injustice. This is what Upsolve co-founder, Rohan Pavuluri, claims to be resulting due to the ban against nonlawyers providing simple legal advice for consumer debts. Upsolve is a non-profit organization based in New York City that promotes financial literacy and helps consumers handle their debts. Recently, the company has created the “American Justice Movement”, a program where volunteer counselors are trained to help people who are facing lawsuits over consumer debts; a growing concern for many Americans. In fact, in 2020, at least “four millionAmericans a year were sued over consumer debt, with less than 10 percent retaining lawyers and more than 70 percent of cases ending in default judgments against the defendant.” Moreover, an astonishing 265,000 consumer debt suits were filed in New York, with over 95% percent of the defendants not represented by a lawyer between 2018 and 2019. The inability to get into contact with a lawyer, coupled with their hourly rate greatly exceeding the debt the consumer is trying to dispute, are possible explanations behind the lack of lawyer representation. Upsolve decided that they wanted to fill that role, hence their inspiration for the legal training program. Once implemented, volunteers would be able to sign up to undergo “training” to assist people with their consumer debt suits. The “training” in question consists of reading an 18-page justice advocate training guide.

However, Upsolve has not yet been able to put this program into motion due to New York’s law that bars people without a license from practicing law. This sparked a recent lawsuit, where Upsolve filed against the Manhattan’s attorney general, arguing that barring non-lawyers from giving basic advice through Upsolve’s program violates the First Amendment. The company is hoping the New York law will carve out an exception for their legal training program. Upsolve argues that the services their legal volunteers would provide would simply be helping consumers with debt to understand how to respond to the pending lawsuit. Specifically, in New York, consumers can respond to the summons by filling out a fill-in-the-blank form in which they will assert possible defenses. Thus the question becomes, is this really the practice of law, or rather, simple advice which is protected under the First Amendment? Upsolve argues the latter, in that with the streamlined process in New York, the program’s services are just narrowly tailored towards filling out the form. While most ordinary laypersons would be able to fill out the form, low-income consumers who struggle with financial literacy are likely to have issues.

Laurence Tribe, a legal scholar who headed the access to justice initiative during President Obama’s term, claims the ban on non-lawyers who want to help unrepresentative consumers afflicted with consumer debt seems to be a law that was created to prevent competition for legal services. However, would the availability of more people to assist consumers really take away from those billable hours? Debt claim cases have increased tremendously over the past few years, filling up the civil court dockets, as cases have doubled from 12% in 1993 to 24% in 2013. With volunteer counselors helping consumers faced with consumer debts suits, this could potentially eliminate the need to go to court and reduce the amount of cases filed in civil courts substantially. In fact, Pew Charitable Trust believes the increased availability of online services for consumers with debt could help to lessen the floodgates in courts.

Nonetheless, the court’s decision on this upcoming suit is uncertain. Of course, the ban on non-legal advice was intended to ensure that consumers aren’t being manipulated by others and obtaining the full justice system. But couldn’t it be said that Upsolve and the law share that same mission by ensuring consumers are obtaining the full justice system? At the end of the day, an 18-page training manual could never replace an experienced lawyer with years of legal training.

The House of Representatives is preparing to pass a China competitiveness bill authorizing billions of dollars for research and development in critical research, such as: emerging technologies, 5G, and cybersecurity. Of particular interest is the $52B earmarked for the domestic semiconductor industry, an investment that comes in response to the global semiconductor shortage.

The pandemic famously disrupted global supply chains, and the semiconductor shortage was amongst the greatest disruptions. The chip shortage slowed manufacturing in virtually every industry from videogames and data centers to smartphones and automobiles. Profits at Ford Motors fell 50% last year because of the global shortage of chips. Jaguar Land Rover predicted similar losses. The auto industry is forecast to produce more than five million fewer cars in the next year.

Given these disruptions in global supply chains, Washington is answering panicked calls to reinvigorate domestic production of semiconductors. While previous China competitiveness bills struggled to achieve bipartisan support, the U.S. Innovation and Competition Act passed the Senate last June. Its early success in the Senate came in part from support of the bill from big business. Feeling the squeeze of the chip shortage, chief executives from major U.S. companies such as Apple, Alphabet, and General Motors have favored drafts of the bill that addressed competition with China.

As the bill reaches the House, however, there appears to be even less bipartisan agreement. Reasonable arguments emerge from both sides of the aisle. Progressives warn that a bill too “aggressively focused on competition with China” stirs up superpower rivalry and techno-nationalism. With the United States and China locked in open ideological competition, Democrats fear that political aggression toward China risks starting a new cold war. Across the aisle, Republicans criticize elements of the bill that are too soft on Beijing. They point to Beijing’s horrific treatment of Uyghurs, the erosion of civil liberties in Hong Kong, and military threats to democratic Taiwan. Still others see little point in avoiding a conflict with China, when a new cold war is already underway.

Whatever one’s views are on competition between the United States and China, the disruptions to global supply chains will continue to affect everyone in the short-term. The outcome of the China competitiveness bill will have implications that reach far beyond the function of our phones, the cars we drive, or the bottom-lines of the companies that produce them. The bill will shape relations between the United States and her greatest, wealthiest, most-sophisticated rival to date. If that relationship soured beyond repair the ensuing consequences could be catastrophic. By comparison, the pain of today’s global disruptions would seem like little more than a minor pinch.

2021 saw a jump in cybersecurity deals, and a slowdown in this chunk of tech M&A this year seems highly unlikely. In the first three quarters of the past year, 151 transactions closed compared to 88 and 94 in 2019 and 2020, respectively, with most of them in the identity and cloud security sector. This year could surpass last year’s record figures in M&A deal numbers and value.

There are multiple reasons why paying 11.3 times the average trailing twelve-months-sales to acquire a reliable cybersecurity firm could be a good idea. Nowadays, a hacker attack, data leak, or general severe cybersecurity malfunctioning could spell the death sentence for even a solid and highly profitable corporation. Market players showed to be more than happy to pay hefty premiums to merge with a company that can protect and manage their networks and data. This behavior feels akin to buying insurance against unpredictable and potentially catastrophic events, but with the benefit of making systems more efficient.

The pandemic massively increased the interest in cybersecurity companies and fed market players’ and government paranoia. We learned that nearly everything can be done online, and the need for more investment in network and data protection became painfully obvious. Restrictive border measures during the pandemic accelerated this digital transformation. Besides the driving factor of remote work, e-commerce boomed, and buzzwords like the internet of things, identity management solutions, and even the metaverse are repeated ad nauseam. Moreover, the rising interest in cryptocurrencies and digital assets creates a compelling opportunity for cybercriminals. Cyberattacks and data leaks occasionally made headlines in the last ten years, injecting a substantial dose of fear to companies and governments. From the actions of Edward Snowden to Yahoo’s data leak during Verizon’s merger, or the more recent LinkedIn scandal involving 700 million of its users, some firms were reminded of the importance of cybersecurity management the hard way.

The cybersecurity market is growing at a fast pace. In 2020, the estimated value was $156.26 billion, and it is expected to reach $352.25 billion by 2026, according to a Mordor Intelligence study, meaning a compound annual growth rate of around 14.5%.

The attention players pay to cybersecurity in today’s deal world can be observed not only by looking at the number of companies acquired in the sector, but also by looking at how due diligence is conducted and purchase agreements are drafted. In mid-2020, the ABA Mergers and Acquisition Committee published a study tracking two newly appearing representations and warranties in sale and purchase agreements related to privacy and cybersecurity. Deal lawyers increasingly view cybersecurity due diligence as a crucial element for a successful closing, and cyber risk remains one of the biggest concerns post-acquisition. The complexity of the threats requires firms to spend money and time to discover and protect against cybersecurity threats. This is especially true in the finance, healthcare, retail, and energy sectors.

With a fast-growing market, rising pressure on governments and corporations, and remote work presumably becoming a permanent option for many workers, we will likely experience further growth of cybersecurity deal activity in the following years, which may have interesting effects on the M&A legal practice. From being perceived as a tedious and negligible detail, cybersecurity has become a pivotal component of every deal, and the companies operating in the sector are becoming irresistible targets. Valuations are soaring, and paying attention to cybersecurity action in 2022 will be necessary to keep abreast of the M&A development.

New York Assemblywoman Dr. Anna R. Kelles and New York State Senator Alessandra Biaggi introduced the Fashion Sustainability and Social Accountability Act (“the Act”) on January 7th, 2022.

The proposed legislation, which currently remains in committee, would require footwear and apparel manufacturers, who have sales of at least $100 million a year and do business in New York, to map a minimum of 50% of their supply chain. This means companies would be required to gather information about their suppliers and their suppliers’ suppliers from the collection of raw materials to the manufacturing and distribution of products. The Act would require companies that fall within the proposed statute, like H&M and Nike, to identify their most significant social and environmental impacts related to unfair wages, energy consumption, greenhouse gas emission, and water and chemical management. The companies would also be required to disclose the volume of materials—such as leather or cotton—that they sell. Separately, the Act would require each company to draft and implement a proposal to reduce their most socially and environmentally damaging practices. The Act would require their plans to include compliance with the Paris Climate Agreement regarding carbon emissions. The data and reporting these companies are to provide would be made publicly available online.

While the Act is sure to be met with pushback and revision as it advances through the New York state legislative process, its current form offers interesting and innovative strategies for leveraging large corporations into more transparent and environmentally conscious business practices.

The Act targets large corporations who can afford to undertake the substantial costs associated with reporting copious information across their operations. It also allows smaller businesses in the fashion industry to innovate and compete efficiently without these additional operational costs. By imposing costs on big corporations related to their larger infrastructure, the Act may have the added benefit of providing smaller fashion companies with a comparative advantage in New York, a key fashion market for small, potentially disruptive players in the fashion industry.

The Act furthers transparency for inadequate working conditions. It requires large apparel and footwear companies to report and highlight their operations providing deficient pay or unacceptable conditions, potentially leading to improved conditions for workers due to—or in fear of potential—public outrage. In addition, it requires the businesses that fall within the statute to contemplate and effectuate their plans for a more sustainable future.

While concerns about the potential economic impact of this piece of legislation are important to consider, New York City’s primacy in the fashion industry and public support for environmental initiatives will likely disincentivize companies from leaving the state. Large fashion corporations might be tempted to stop doing business in New York. Still, these financial interests are likely outweighed by the prominence of the New York fashion market combined with the current cultural focus on climate change. American consumers are interested in investing in and supportingcompanies committed to sustainability and mitigating their environmental impact. This is demonstrated in the present context by the reluctance of potentially affected brands to speak out against the Act. Whether, in practice, corporations can avoid these disclosures without public backlash remains to be seen.

The Fashion Sustainability and Social Accountability Act is an exciting piece of proposed state legislation that, if successful in its aims, could provide a blueprint for regulation at both the state and federal levels of other industries with large supply chains and lasting environmental impacts.

In a world where bias is everywhere, it’s impossible to achieve true neutrality. This is true for even seemingly neutral developments in technology that have no inherent concept of bias. Because we live in a world fraught with systemic inequality and racism, the technologically powered machines humans have created are engrained with the very biases that perpetuate racist and discriminatory notions of thinking. In this article, I seek to discuss the bias that exists in modern Artificial Intelligence (AI) technology, the consequences of such bias, and possible solutions presented by experts in the field.

There is no doubt that AI has its benefits. Many of its creators and adapters saw the “potential to stimulate economic growth [by way of] increased productivity at lower costs, a higher GDP per capita, and job creation.” AI is also regularly used in the education, housing, employment, and credit industries. Furthermore, AI has been used to “revolutionize our approach to medicine, finance, business, media and more.” While all of this is positive news for world advancement, it would be irresponsible to ignore the bias that already exists in these industries, which in turn, creates biases in the AI systems that they implement. Some experts knew that AI would inherent our discriminatory practices which negatively affect people in marginalized communities on a fundamental level. In Olga Akselrod’s article, How Artificial Intelligence can Deepen Racial and Economic Inequities, she shares that “rather than help eliminate discriminatory practices, AI has worsened them — hampering the economic security of marginalized groups that have long dealt with systemic discrimination.” An example of this bias is given by Khari Johnson who wrote an article for Wired, A Move for ‘Algorithmic Reparation’ Calls for Racial Justice in AI. In that article, Khari shares how “algorithms used to screen apartment renters and mortgage applicants disproportionately disadvantaged Black people [due to the] historical patterns of segregation that have poisoned the data on which many algorithms are built.” It feels impossible to create neutral technology when humans have bias seeped into the DNA of our culture. The Federal Trade Commission writes that a further consequence of this bias in healthcare is that “[technological advancements] that [were] meant to benefit all patients may have [also] worsened healthcare disparities for people of color” and as a result, “the economic and racial divide in our country will only deepen.” Every industry that uses AI is affected by this bias and must do the work to make sure that they are not only aware of how it affects communities of color, but also take active steps to curtail its effects. 

Fortunately, experts have suggestions to address this problem. Prior to addressing solutions, I would be remiss to ignore the reality that the vast amount of people in the technology industry is cis-gender white men. Rashida Richardson, one of the few women of color in the tech space, explained that “AI can benefit from adopting principles of transformative justice such as including victims and impacted communities in conversations about how to build and design AI models and make repairing harm part of processes.” Richardson advocates for an inclusion that positively impacts the algorithms. I would further advocate that the makers and users of AI technology begin to actively and purposefully ask marginalized people to share their expertise and experience on all levels– from intentional focus group participants to becoming co-creators and co-implementers of the technology.

Other experts in the field share the following solutions to ending bias in AI technology. Andrew Burt offers a potential solution to ending bias in AI technology and argues that the first step to fixing this problem is to start by “looking at a host of legal and statistical precedents for measuring and ensuring algorithmic fairness.” By this, he means looking at U.S. laws in other areas like civil rights, housing, health care, and employment to understand how these sectors have attempted to tackle discrimination problems and as a model for AI. Burt acknowledges the complexity associated with completely eliminating discrimination but further urges industries and businesses to 1) carefully monitor and document all their attempts to reduce algorithmic unfairness and 2) generate clear, good faith justifications for using the models they eventually deploy. A common concern around these solutions is that it gives businesses that use AI too much of a choice to either implement these solutions or not. Luckily, the Federal Trade Commission (FTC) is working to tackle this by implementing laws like Section 5 of the FTC Act, The Fair Credit Reporting Act, and The Equal Credit Opportunity Act. Each of these laws are attempts to address this issue from a legal standpoint. The FTC effectively puts weight behind Burt’s solutions by making it clear that if AI  implementers fail to hold themselves accountable, they should be prepared for the FTC to do it for them. 

In the end, the best solution is Richardson’s proposal to invite victims and impacted communities into the conversations around building and designing equitable AI models. As an individual affected by the biases in AI tech, Richardson acknowledges and understands the importance of inclusion. She believes that this involvement is vital if experts aim to devise creative solutions that help avoid as much harm as possible towards marginalized groups.

In February 2021, an icy cataclysm struck deep into the heart of Texas.  As citizens struggled to combat severe weather conditions, wholesale prices for electricity spiraling upwards to $9/kWh (for comparison in 2020, wholesale electric supply prices in Texas hovered around 2.2 cents). The chief culprit for the spike was the decline in supply caused by natural gas plants that went offline when they succumbed to the harsh weather conditions that battered the state. In response to this failing, Texas passed SB 2 & 3 which provide for the weatherization of power generation, natural gas facilities, and transmission facilities against extreme conditions.

Additionally, the legislation also provided for governance reforms to the Electric Reliability Council of Texas (“ERCOT”), the overseer of Texas’ peculiar energy market. Many citizens were quick to blame the system operator which has uniquely operated without any direct federal oversight since the foundation of its predecessor in 1941. Since 2000, it has overseen Texas’ deregulated energy market that largely operates according to basic supply-and-demand principles. Post-storm, it has faced major criticism and lawsuits for its handling of the situation that ultimately left millions of Texans without power. In September, Richard Glick, the newly appointed chairman of the Federal Energy Regulatory Commission (“FERC”), took aim at the autonomy of the ERCOT. Glick has called Texas’ arrangement “very short-sighted” and promised to consider recommendations that would bring Texas’ mammoth energy market in line with those around the country.  While Texas’ oil pipelines that supply fuel to generators are generally exempt from FERC oversight, the FERC has alluded to pending investigations of pipeline operators for market manipulation.

These remarks may have been well-heard by the Texas Public Utilities Council (PUC). At a recent meeting, the PUC agreed to explore the possibility of setting a reliability obligation for all load serving entities. Such a reform would create a market for stand-by generation that the grid operator would call upon to perform during periods of high demand on the delivery system. Stand-by generation is typically not compensated by prevailing market prices at dispatch but rather by ‘capacity payments’ set on a roughly annually basis by the grid operator. While critics contend that the imposition of capacity payments, would unduly inflate the consumer cost of electricity and subsidize inefficient assets, supporters say that they would mitigate the widespread blackouts and exorbitant bills that Texans experienced.

As temperatures begin to drop around the country, some fear that Texas is still not prepared for cold winters ahead. The imposition of reliability obligations that clash with the philosophical underpinnings of the Texas market is still speculative and the effects of the recent legislation will not be immediately felt.  The legislature did not mandate that the weatherization requirements of SBs 2 & 3 be implemented until 2023. Because the legislation limited weatherization to only ‘critical’ natural gas wells and pipelines responsible for supplying power plants, regulators must go through the painstaking process of cataloguing such before regulators make asset owners responsible for upgrades.

The irony of America’s energy hub being unable to serve its citizens basic needs may be too much for its citizens to bear once more. In 2011 economists at the Dallas Federal Reserve estimated that it would cost between $85 million and $200 million annually to winterize Texas plants – less than 1% of the annual revenue of the Texas gas industry. On January 2nd, a cold front in West Texas caused gas production to plummet 25% before rebounding. For many Texans, the lingering clouds of energy worries will persist unnecessarily until a more permanent solution is found.

The idea of a virtual world straight out of Ready Player One is rapidly becoming a reality. Whereas the Internet today is largely a 2D platform, the metaverse opens the door to a 3D online experience whereby users could partake in more life-like experiences, potentially turning what was initially a novelty entertainment technology into a major facet of modern life. Metaverse-equipped VR headsets in public could become commonplace. Meta Platforms, Inc., formerly Facebook, rebranded itself in October 2021 to pivot and capitalize on the burgeoning virtual reality (VR) and augmented reality (AR) market. For his part, Apple’s CEO Tim Cook said it will be a critical part of his company’s future as well.

Wall Street has taken notice of this latest development. Since the Meta rebranding was announced, Meta’s share price has gained 6.7% and Apple’s 18%.

Even governments are hopping on the metaverse bandwagon. South Korea’s ministry of science, for example, even formed its own metaverse partnership and could roll out phase one as early as this year. However, there are legal implications and concerns across all corners of the metaverse.

Users’ virtual avatars present new, intersecting issues of intellectual property, fraud, and “meta-personhood.” For example, what sort of ownership rights do creators have over avatars in the metaverse, and where is the line between developing a creative avatar and false representations or illegal impersonations? This likewise raises, and complicates, the question of whether avatars can serve as legal representatives. Metaverse companies have an interest in keeping people in the metaverse for as many hours a day as possible. Avatars being able to be legal representatives for dealmaking, legal proceedings, and processes requiring a unique person could encourage a greater presence and commerce in the metaverse, perhaps creating an entire market of “m-commerce.” However, substantial concerns exist over our ability to verify avatars as legal representatives. Someone could detrimentally rely on the promise of an impersonator of a real-life person using an avatar – and who will enforce metaverse agreements is a whole other puzzle.

Jurisdictional and accompanying bureaucratic matters are also a major concern of the fledgling metaverse landscape. As mentioned above, if an issue arises over a meta contract, whether over potential impersonation of a party or over its substance, it is unclear who has jurisdiction over those issues. Furthermore, taxation could quickly become complicated. If a user obscures their real-world location and makes purchases in the metaverse, local governments may need to fight to collect sales taxes, as many did for Amazon sales.

Additionally, the matter of what behavior is permissible implicates civil and criminal enforcement across the globe. For example, in a video game, destroying virtual environments can be part of the entertainment experience, and would likely continue to be so, in some contexts, within the metaverse. However, outside of entertainment contexts, destroying metaverse property using AR/VR tools could be comparable to destruction of real property. New metaverse crimes are certain to arise, and they may be impossible to predict until they occur. Outside of meta-crime, the metaverse could create problematic consequences for the real world. For example, if another user flashes strobing lights while a user with epilepsy is using a VR headset, that could cause serious medical consequences in the real world.

The creation of the metaverse results in a regulatory vacuum, not unlike the vacuum created by the Internet itself. Governments slowly figured out solutions to some of the legal issues posed by the internet, such as sales taxes. However, the plethora of unresolved questions of online governance indicate that certain regulatory vacuums were never fully addressed. While many characterize the metaverse as a potential way for people to escape from reality, it seems likely that the metaverse may simply trade one set of legal concerns for another.

Since Nvidia’s announcement to acquire Arm in late 2020, regulators have lined up to investigate and prevent the deal. Besides the recently-announced US Federal Trade Commission effort to block the merger, the two companies also face formal investigations by the EU, the UK’s Competition and Markets Authority, and agencies in South Korea, Japan, and China. While this effort by one of the biggest semiconductor firms in the world to purchase a significant computer chip designer was always expected to draw scrutiny, the current scenario must be regarded by proponents as close to the worst possible case.

Both Nvidia and Arm are major parts of the global semiconductor industry. Semiconductors and the chips made with them have brought ever smaller, cheaper, more efficient, and more durable computers. Over recent decades, they have become indispensable not only for the usual applications in engineering and telecommunications, but increasingly for many aspects of transportation, manufacturing, medicine, and entertainment. The Covid-19 pandemic, by interrupting global supply chains and causing prolonged chip shortages, has brought a great deal of attention to the crucial role of semiconductors in almost every major sector of the economy. For example, the shortage of chips is one of the main reasons car prices have risen so precipitously over the last year.

Although both companies are crucial in this sensitive global industry, they are critical for distinct and perhaps complementary ways. Nvidia is best known for GPUs—graphics processing units—that were originally associated with computer gaming. Over the last decade, however, they have found a use in almost every powerful computing project, from machine learning to cryptography. Arm, on the other hand, specializes in microprocessors and through the license of its chip designs, supplies approximately 90% of the world’s smartphones with crucial components. Nvidia and Arm have tried to use these distinctions to defend the merger from antitrust criticisms, emphasizing that they are not competitors. While this is essentially true, the deal is still a classic example of vertical integration. Such integration can potentially have social benefits, but its anticompetitive and monopolistic tendencies are also well known.

The potential for the deal to negatively impact market competition hinges on Arm’s unique role in the industry. For much of its thirty-year history, the firm has functioned as the “Switzerland” of microprocessors: Arm designs the chips and licenses them widely to companies like Google, Apple, and Microsoft, usually as part of ongoing support and development relationships that involve the exchange of sensitive or even proprietary information. This means the merger could potentially allow Nvidia to drive down its own costs in sourcing vital technology, but also to strangle its most powerful competitors by gaining valuable non-public information through their previous dealings with Arm.

The FTC’s suit also represents a pivotal moment in American politics that, for all its importance, is ultimately independent of the sensitive particulars of the semiconductor industry. President Biden’s nomination earlier in the year of Lina Khan was a significant moment: Khan is not only (as widely reported) a critic of Big Tech and the youngest FTC chair in history, but even more fundamentally, a scion of the new antitrust movement that has been brewing in neglected corners of the American left for over a decade. This movement sees the post-Watergate Democratic turn against antitrust enforcement (especially in the case of vertical mergers) and policy as the hidden key to modern politics—not to mention many contemporary economic and social problems. They are especially eager to avoid repeating the antitrust mistakes of the Obama administration. Khan’s nomination was thus seen as a somewhat surprising victory for progressives in a particularly substantive area. The FTC’s suit against the merger is Khan’s first major action as chairwoman and has enormous significance for the movement’s efforts to fundamentally transform American antitrust policy.

Nvidia and Arm have already fought back hard against these challenges. Together the two companies argue that the merger will not end Arm’s commercial neutrality, but rather save the stagnant firm from an unforgiving capital market and opportunistic “asset strippers.” More positively, they assert that the deal will drive technological innovation by developing the complementary strengths of the two companies. This could lead to more efficient data centers and even advancements in the new field of edge AI. While it is hard to believe that Nvidia would not, sooner or later, regardless of promises to maintain Arm’s neutrality today, try to use the merger against its competitors, it may well also be true that an IPO would be disastrous for Arm’s current business model or long-term independent survival. And certainly, the potential for complementary development is real. Whatever their outcomes, the deal and the FTC’s suit have enormous significance for the future of this crucial sector.

The global lithium rush is on. Governments and consumers are concerned about climate change and looking to reduce carbon emissions from public transit systems and vehicles, especially personal vehicles. Whether electrifying these sectors is the best way to address their role in climate change remains a serious policy question, but to a significant extent, governments, markets, and consumers have already decided: people should drive electric cars, ride electric buses, and carry out delivery by electric trucks.

There are currently two major technologies that could power this new infrastructure: lithium-ion batteries and hydrogen fuel cells. Both have significant advantages and disadvantages, but for high frequency, short distance, low volume consumer/retail use, lithium-ion batteries are usually the better option. This is due to the significantly greater energy efficiency of the technology in such applications. Hydrogen cells, by virtue of their greater energy density, are likely superior in longer range and higher volume shipping. But for the most part, further technological and infrastructural development is required before they can seriously challenge the emerging role of lithium-ion batteries in most markets.

Unsurprisingly, these developments are driving a major increase in global lithium demand. Many analysts expect the compound annual growth rate of the global lithium mining industry to run at 5-7% for much of the coming decade. Australia and China have been leaders in the industry for the last several years, but as demand grows, new players are emerging everywhere, seeking to develop new sources of the precious element. Much of this attention is focused on the so-called “Lithium Triangle.” Straddling the borders of Chile, Bolivia, and Argentina, is thought to hold a significant—even perhaps, outright majority—share of the world’s total lithium reserves.

Development of this region faces a number of challenges at the intersection of finance, politics, and environmentalism. Argentina hopes to capitalize on its vast reserves and challenge its neighbor, Chile, which is the leading South American country in the industry. On the other hand, Argentina has faced decade-long economic problems such as continually high inflation, a shifting regulatory apparatus, and relatively high taxes on mining investment. Additionally, there are important issues of public investment, political control, and environmental damage to address.

The strategic-diplomatic significance of lithium and the industries involved in extracting and processing it is also growing. China is the largest electric vehicle market in the world, and Chinese corporations dominate much of the supply and production chain of electric vehicles and their batteries. As the US and China grow more confrontational across the entire spectrum of their complex relationship, this reality adds a level of strategic state competition to what would have been a fierce economic one regardless. Recent supply chain issues, precipitated in large (if not exclusive) part by the COVID-19 pandemic, have also caused more Americans to consider the value of redundancy—and even sovereign control—in the matter of global production and transportation of vital goods and commodities. Such concerns only complement the growing salience of “reshoring” in American political discourse.

Considering the surging market for and growing strategic competition over access to lithium, the recent bidding war between Lithium Americas and Contemporary Amperex Technology Co. Ltd. (CATL) over the Argentine firm Millennial Lithium is especially significant. The Chinese-based CATL, a massive recent growth story, controls approximately a third of the global electric vehicle battery market. Lithium Americas, meanwhile, is a Canada-based company developing mining projects in Nevada and Argentina. Millennial, which had been working on a major lithium claim near Lithium Americas’ own Argentine project, was an attractive expansion opportunity for both companies. Jon Evans, the CEO of Lithium Americas, specifically cited the strategic aspect of the industry as a possible advantage to his company in winning the contest: “This transaction is a lower regulatory risk than CATL or another Chinese company. Like it or not, there’s critical mineral strategies by the US, Canadian, and Australian governments that could have played a part in this.”

The issue has come to the US as well. Lithium Americas also seeks to develop what it claims could become the biggest lithium mine in the world in rural northern Nevada. This development would provide fuel for the US’ own decarbonization goals, position it strongly in a strategic global industry, and do so on American soil with American jobs. It may even be indispensable for some of these important goals. But it would also threaten the local environment, and potentially the interests of ranchers and indigenous people. Indeed, Thacker Pass already looks set to provoke another high-profile legal and political fight in the vein of those over the Keystone and Dakota Access pipelines—only this time, over a flagship green technology. Ultimately, there are no easy answers to the questions posed by the global rush for this “white gold.”