Chinese Regulators Could Delay Nvidia’s Acquisition Of Arm Holdings

Nvidia’s (NASDAQ:NVDA) $40-billion U.S. takeover of British chip designer Arm Holdings could be delayed by the Chinese government.

Santa Clara-headquartered Nvidia has submitted a formal application to Chinese regulators, asking for approval of the Arm acquisition. Nvidia has said that the regulatory process is confidential, but it remains confident that it will receive approval and "close in early 2022."

When the Arm acquisition was announced last September, Nvidia and Arm said it would take approximately 18 months to finalize. The combined companies would be among the biggest players in artificial intelligence around the world.

However, Chinese regulators could take up to 18 months from now to reach their own conclusion on the deal, according to government representatives in Beijing.

Complicating matters is the fact that Arm Holdings has as a joint venture called "Arm China" with Chinese private equity firm Hopu Investments. Arm China is headquartered in Shanghai, meaning China’s Ministry of Commerce and China’s State Administration for Market Regulation will have the right to review the proposed Nvidia deal.

Regulators in the United Kingdom, Europe and the U.S. are also probing Nvidia’s acquisition of Arm to determine its impact on competition and the future direction of the microchip sector.