According to Bloomberg News, Nvidia is reportedly planning on giving up on its $40 billion acquisition of chip designer, Arm. The acquisition has been met with great scrutiny from regulators and opposition from rivals. The uproar has forced Nvidia to adjust its original timeline for the purchase.
However, Bloomberg now reports that Nvidia does not expect the deal to go through at all, as Arm’s current owner SoftBank plans on “stepping up preparations” to take Arm public via an initial public offering.
Bloomberg highlights that no final decision has yet been made, as both Nvidia and SoftBank remain publicly committed to the deal.
A SoftBank spokesperson commented to Bloomberg News, “We remain hopeful that the transaction will be approved.”
Arm is one of the most important silicon chip designers and has become popular over the years given its policy of neutrality. Arm has been known to create designs for numerous rival companies across the globe, including Qualcomm, MediaTek, and Samsung. If Arm gets acquired by Nvidia, the latter will receive all the royalties and will control chip design for nearly all Android phones.
However, given Nvidia’s stance on the acquisition, regulators are concerned that the policy of neutrality would soon end, with Arm lowly aligning with Nvidia’s interest, suppressing the development of rival companies.
However, a spokesperson for Nvidia commented,
We continue to hold the views expressed in detail in our latest regulatory filings — that this transaction provides an opportunity to accelerate Arm and boost competition and innovation.
This shift in dynamic has forced many regulators in the United Kingdom, United States, and the European Union to oppose the deal, with the United States’ Federal Trade Commission going as far as suing Nvidia for the acquisition. The conclusion of these cases will take some time and will consequently stretch the already extended acquisition, since it first began in September 2020.
Nvidia is also expecting tough scrutiny from Chinese regulators. The scrutiny surrounding the acquisition is similar to American chip designer Qualcomm’s proposal to acquire NXP semiconductors in 2016. The $44 billion deal was eventually abandoned after two years due to strong objections from Chinese regulators.