What's Going On With Vmware Stock Thursday?

U.S.'s advanced artificial intelligence technology embargo on China could cost the Broadcom Inc AVGO - Vmware, Inc VMW deal lest China acts as a spoilsport. Beijing is weighing holding up the $69 billion deal. 

China's State Administration of Market Regulation is yet to approve the deal the companies announced in May 2022 and is likely to delay approving the transaction, Financial Times reports.

China's merger and acquisition approvals for U.S. companies require additional consultations with the Ministry of Foreign Affairs and the State Council. 

This week, the U.S. divulged plans to halt shipments to China of more advanced AI chips designed by Nvidia and others, citing military threats.

The fresh sanctions extend across several countries, including Iran and Russia, and blacklist Chinese chip designers Moore Thread and Biren.

The latest embargo will hit Nvidia Corp's NVDA A800 and H800 chips, tailor-made by the chip designer to comply with China's previous sanctions due to a change in chip parameters.

Broadcom stated no legal impediment to the deal closing in the U.S., while it had received regulatory approvals in nine jurisdictions and was making progress with filings worldwide. 

The group expected the transaction to close in its fiscal year ending this month. VMware expects the deal to close on October 30, 2023.

South Korea's Fair Trade Commission is also yet to approve the deal. An FTC spokesperson said a decision was likely to come next week. 

Chinese state security officials raided the offices of U.S. consultancies such as Bain & Company and Mintz Group this year amid growing U.S.-China geopolitical tensions. China also imposed sanctions on Micron Technology, Inc MU. 

In 2018, then-US president Donald Trump blocked Broadcom's $142 billion bid for chipmaker Qualcomm Inc QCOM, citing national security concerns. Broadcom subsequently relocated its headquarters to the U.S. 

 A third of Broadcom's $33 billion revenue came from shipments to China in the chip designer's most recent financial year. VMware executives have said its business in the country is "robust."

Price Action: VMW shares traded lower by 9.25% at $150.88 in the premarket on the last check Thursday. AVGO shares traded lower by 1.74% at $871.59.