By Nivedita Balu

(Reuters) – Nvidia NASDAQ: Corp’s hopes of acquiring British chip tech provider Arm at a high-priced $80billion may not come true, however analysts feel the chipmaker will have plenty to keep its eyes on as it enters the metaverse.

The U.S. Federal Trade Commission filed suit to stop the agreement, which was already under scrutiny from regulatory authorities around the world.

Nvidia shares dropped by 3% Friday morning.

Analysts believed for a long time that chances of this deal being approved were slim.

“Even if Nvidia does not complete its ARM Holdings (LON:) acquisition, demand for NVIDIA AI continues to accelerate,” Tigress Financial Partners’ Ivan Feinseth said, adding that “Nvidia is all about AI and the Omniverse/metaverse.”

Nvidia, world’s largest manufacturer of AI chips, graphics and software, is increasing its investment in data centers as more internet businesses invest into the metaverse. This online universe connects people using augmented and virtual realities.

Nvidia would be able to offer Arm access to its chip and blueprints through the blockbuster agreement. Arm is a major processor of chips for Apple Inc (NASDAQ) Inc, Qualcomm (NASDAQ) Inc, and Samsung Electronics Co Ltd. This gives Nvidia a strong position in the global semiconductor sector.

Nvidia (NASDAQ:) would face intense competition from rivals such as Intel (NASDAQ;) and Advanced Micro Devices Inc.

Ruben Roy, WestPark Capital analyst said that Nvidia’s ability to invest in the ARM ecosystem is being lost.

According to the FTC, Nvidia would have control over computer technology and design that is used by competitors in order to create their chips.

It would be nice to own a gun… “Owning Arm would be very nice…But they will save their purchase price…We think the company is fine any way,” Bernstein analyst Stacy Rasgon explained.