Investigations into the controversial $40bn acquisition of UK chip designer ARM by Nvidia have been paused by the European Commission.

According to a filing, the regulator has halted the probe into the largest ever chip deal as they await further information.

The European Commission paused proceedings on November 25th after missing its initial deadline, citing delays that have been common since the onset of the pandemic.

Companies have found it more difficult to gather data from customers struggling with lockdown restrictions and staff shortages.

Additionally, the US Federal Trade Commission (FTC) is suing to block the Nvidia acquisition stating that the deal would ultimately stifle competition within the market.

There has been controversy over the landmark deal after the Competition and Markets Authority (CMA) warned in August that the Nvidia takeover could raise competition concerns.

The CMA stated that the deal could stifle innovation and restrict access to ARM’s intellectual property by Nvidia’s rivals, harming competitiveness and affecting areas such as data centres, gaming, IoT tech and self-driving cars.

Nvidia’s acquisition is particularly controversial as regulators and governments look to investigate big tech and the wider implications on the microchip industry and ARM’s customers, which in some cases are competitors of Nvidia.

There is currently a global shortage of chips, affecting industries worldwide. The FTC said the concern is that Nvidia, by buying a large global chip designer, will gain a monopoly over competitors and “stifle competing next-generation technologies”.

In a statement, FTC Bureau of Competition Director Holly Vedova said: “The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies.”

Vedova added: “The FTC’s lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations.”

In a statement to the Verge, spokesperson from Nvidia said that the company would “continue to work to demonstrate that this transaction will benefit the industry and promote competition”.

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In early August 2021, reports came out claiming that the UK Government was considering blocking the acquisition over concerns around national security.

The news was originally reported by Bloomberg, citing people familiar with the matter.

On July 20th this year, the Competition and Markets Authority sent its Phase 1 Investigation report to the Secretary of State for Digital, Culture, Media and Sport.

The report examined whether the deal would be anti-competitive, along with passing on third-party concerns about potential national security issues.

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