Thursday’s blockade lawsuit was brought by the Federal Trade Commission. NvidiaSoftBank purchased Arm at $40 billion for antitrust reasons.

Since its announcement last year, regulators have been closely watching the deal. It faces the greatest hurdle yet and it threatens to be stopped by the United States.

FTC: “The vertical deal proposed by the FTC would give control to one of largest chip company over computing technology and designs used by rivals firms for their development of competing chips.” said in an announcement.

Nvidia stock rose by more than 2 percent on Thursday, just before the announcement. It did not change much after the announcement.

Arm is the core supplier of architecture technology to many semiconductor companies. Nearly all smartphone processors that power smartphones are powered by Arm’s instruction set. AppleAndroid smartphones that are used Qualcomm chips.

However, Nvidia’s traditional role as a supplier to the chip sector was that of a neutral supplier. This raises concerns about Nvidia cutting off suppliers from vital Arm technology. Nvidia uses Arm-designed processors with its Arm architecture. But graphics processors are the most well-known product of Nvidia.

In its statement, the FTC claimed that Nvidia’s proposed merger “would give it the opportunity and incentive to use control of this technology against its competitors, which would reduce competition and eventually result in lower product quality, less innovation and higher prices.”

FTC claimed that Arm’s licensees (which include Nvidia competitors) share information about competitive opportunities with the tech company. FTC is suing about chips that can be used to assist drivers, network products and ARM microchips designed for cloud computing businesses.

A detailed investigation by the European Commission was announced by the Commission deal in October.

A representative from Nvidia stated in a statement that “As We Move into the Next Step in the FTC Process, we will continue working to show that this transaction will benefit industry and promote competition.” “NVIDIA will invest in Arm’s R&D, accelerate its roadmaps, and expand its offerings in ways that boost competition, create more opportunities for all Arm licensees and expand the Arm ecosystem. NVIDIA will continue to preserve Arm’s open license model and ensure its IP remains available for all licensed parties, both current and future,” the statement continued.

The company previously stated that the Arm transaction would close by 2022. According to the FTC, an administrative trial is expected to start in August 2022.