For those who came in late, Nvidia wants to spend $54 billion to buy British chip designer ARM, but the EU said that it is concerned that the deal could lead to higher prices, less choice and reduced innovation.
The EU is not the only one gunning for the deal. The Britain's competition agency is also probing the deal for the country's most important technology company, warning that it could damage competition and weaken rivals.
The European Commission viewed as insufficient concessions offered by Nvidia, the world's biggest maker of graphics and artificial intelligence (AI) chips during its preliminary review.
Nvidia has not disclosed what these are but it has previously said it would maintain ARM as a neutral technology supplier to sooth concerns from customers such as Qualcomm, Samsung and Apple.
Nvidia said that it was working closely with the European Commission through the regulatory process.
“We look forward to the opportunity to address their initial concerns and continue demonstrating that the transaction will help to accelerate Arm and boost competition and innovation, including in the EU", an Nvidia spokesperson said.
The Commission said it would decide by 15 March whether to clear or block the deal.
"While ARM and Nvidia do not directly compete, Arm's IP is an important input in products competing with those of Nvidia, for example in datacentres, automotive and in the Internet of Things", EU competition chief Margrethe Vestager said in a statement.
"Our analysis shows that the acquisition of ARM by Nvidia could lead to restricted or degraded access to ARM's IP, with distortive effects in many markets where semiconductors are used", she continued.