What happened

Shares of Nvidia (NASDAQ:NVDA) had dipped 2% as of 10:22 a.m. EDT Tuesday, possibly in response to an article in the British newspaper The Telegraph over the weekend. In that report, the paper described rising opposition to the semiconductor giant acquiring its British peer, Arm Holdings, from SoftBank Group (OTC:SFTB.Y) in a deal valued at $40 billion. And in particular, The Telegraph mentioned the arrival of a new critic of the deal: Elon Musk.

Short circuit on a semiconductor chip

Image source: Getty Images.

So what

As The Telegraph reports, an ongoing U.S. Federal Trade Commission examination of Nvidia's deal to acquire Arm has already attracted support from corporate giants Amazon (NASDAQ:AMZN) and Samsung, which worry that a combined Nvidia and Arm would dominate the supply of data-center chip designs.

Now, Musk's Tesla (NASDAQ:TSLA) is apparently joining the fray (although Tesla, which no longer possesses a media department, failed to respond to the newspaper's request for a comment).

Now what

From the perspective of Amazon and Samsung, a tie-up between Nvidia and Arm could be seen as bad for Amazon (which might end up paying higher prices for chips at Amazon Web Services) and for Samsung (which would face a much tougher competitor in selling chips).

It's not 100% clear what Tesla's opposition to the Nvidia-Arm merger is, however. In the absence of confirmation from the automaker, The Telegraph could only report that the company has "signaled competition concerns."

Still, when you consider that Tesla switched away from buying Nvidia chips for its electric cars a couple of years ago, and is now designing its own chips (which Samsung manufactures), it seems logical that in this ongoing dispute between Nvidia and its opposition, Tesla would side with the opposing team.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.