Nvidia Corp on Monday said it plans to make a server processor chip based on technology from the United Kingdom’s Arm Ltd, putting it in the most direct competition yet with rival Intel Corp and adding a layer of complexity to the antitrust review of Nvidia’s $40 billion deal to buy Arm.

Intel is the world’s biggest maker of central processors for data center servers but has increasingly seen competition from Arm-based chips. With its “Grace” server processor, Nvidia will be the largest chip company so far to challenge Intel in its key market.

Nvidia shares rose 2.6% and Intel shares dropped 4% in midday trading after the news. Intel shares have risen more than 30% this year as its new chief Pat Gelsinger outlined its strategy to overcome years of manufacturing woes.

Arm’s technology powers the chips in most smartphones, but for the last several years has been making its way into data centers, with companies such as Amazon.com Inc and Ampere Computing designing chips for servers with it.