Nvidia's (NVDA) - Get NVIDIA Corporation Report acquisition of Arm Ltd. from SoftBank has run into opposition from large tech firms who have filed a complaint with U.S. antitrust regulators, according to media reports on Friday.
A consortium comprised of Alphabet's (GOOGL) - Get Alphabet Inc. Report Google, Microsoft (MSFT) - Get Microsoft Corporation Report and Qualcomm (QCOM) - Get QUALCOMM Incorporated Report, among others, has asked antitrust officials to intervene in the sale, Bloomberg reported. At least one of the companies wants the deal "killed."
Nvidia shares were down 1.86% to $598.69 Friday afternoon on the news.
The group argues the $40-billion deal would grant Nvidia control over a critical supplier that licenses essential chip technology to companies such as Apple (AAPL) - Get Apple Inc. Report, Amazon (AMZN) - Get Amazon.com Inc. Report, Samsung and Huawei.
Arm is known as the "Switzerland" of the chip industry because it licenses its chip designs to whoever is willing to pay for them, including rivals to one another. The group of tech companies opposing the sale says that once it acquires Arm, Nvidia could limit other companies' access to Arm's technology or raise prices.
However, Nvidia says the size of the deal incentivizes the company to work with all potential clients in the tech world.
"As we proceed through the review process, we’re confident that both regulators and customers will see the benefits of our plan to continue Arm’s open licensing model and ensure a transparent, collaborative relationship with Arm’s licensees,” Nvidia said in a statement, according to Bloomberg.
The deal, which was announced last September, still has to be reviewed by regulators in the U.S., U.K, EU and China.
In January, U.K. regulators announced they were investigating the acquisition to find out whether the merger would “result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services,” it said.