Some fear that Arm may stop licensing chip designs to computer companies, including Nvidia’s competitors

Chipmaker Nvidia’s $40 billion acquisition of Chip Designer has alarmed regulators in the US, the UK, and the European Union (EU).

Chipmaker Nvidia Corporation’s $40 billion deal to buy chip designer Arm Ltd. from Japanese technology company Softbank has frightened regulators in the US, the UK, and the European Union (EU).

The Federal Trade Commission (FTC) filed a complaint on Thursday to stop the acquisition, claiming that it will make Nvidia so dominant that it will stifle new technologies from other companies.

According to The Associated Press, regulators in the UK and the European Union have initiated investigations into the purchase due to worries about competition.

Some fear that Arm may stop licensing chip designs to computer companies, including Nvidia’s competitors, as a result of the deal.

The FTC is suing to stop the world’s largest semiconductor chip merger from suffocating the innovation pipeline for next-generation technologies, said FTC Bureau of Competition Director Holly Vedova in a statement. This planned merger will alter Arm’s incentives in the semiconductor industry, allowing the merged company to unjustly undercut Nvidia’s competitors.

According to the FTC, the agreement would give Nvidia control over the technology that other businesses use to make their processors. The FTC claims that competitors in markets where Nvidia designs with Arm-based technology may suffer.

Nvidia claims that by purchasing Arm, it will be able to build the world’s premier computing firm for the AI era.

We will continue to work to establish that this deal will benefit the industry and foster competition, the company added. It stated that it is dedicated to preserving Arm’s open licensing model and ensuring that its IP is available to all current and future interested licensees. The FTC’s case would be ‘vigorously contested,’ according to the business.