EU Opens Investigation Into Nvidia's Acquisition Of Arm

The acquisition of a major chip designer firm by Nvidia NVDA — the leading producer of graphic processing units — is being investigated by the European Union.

What Happened: EU Executive Vice President Margrethe Vestager said that following the acquisition Nvidia could make it harder for other manufacturers to access Arm’s technology, according to a press release published Wednesday. The EU is most worried about Arm's neutrality, since limiting access to its technology could severely hurt a significant portion of the semiconductor industry.

Arm licenses its chip designs to companies including Apple Inc. AAPL, Samsung, and Qualcomm QCOM. Many of those companies compete with each other and with Nvidia, so Arm's neutrality is crucial to maintain this fragile balance.

The European Union is far from the only party opposed to Nvidia's acquisition of Arm. Tesla TSLA CEO Elon Musk recently voiced his concern over the deal alongside Samsung and U.S. tech giant Amazon Inc. AMZN.

NVDA Price Action: Nvidia shares lost 1.14% Wednesday, closing at $244.36.