Nvidia reportedly prepares for its ARM acquisition to fall through

Nvidia’s upcoming acquisition of ARM may not go as planned according to a new report from Bloomberg. The $40 billion deal, which would see Nvidia take control of the chip designer currently owned by Softbank Group is said to face significant opposition from regulators as well as ARM’s existing customers.

"Nvidia has told partners that it doesn’t expect the transaction to close, according to one person, who asked not to be identified because the discussions are private,” Bloomberg wrote today. "SoftBank, meanwhile, is stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover, another person said.”

For those unfamiliar, ARM plays a central role in the technology industry today as the company licenses its chip designs to other chip makers such as Qualcomm, Samsung, or Apple. Its acquisition by Nvidia has raised eyebrows from the start as the latter is already a key player in the global chip industry thanks to its popular GeForce GPUs and ARM-based Tegra chips.

According to the Bloomberg report, several companies including Intel, Qualcomm, Microsoft, and Amazon have formed a group to pressure regulators in the US, the EU, the UK, and China to block the acquisition. "In arguing against the deal, companies like Qualcomm, Intel, and Google have said that Nvidia can’t preserve Arm’s independence because it’s an Arm customer itself,” the report explained.

It's true that ARM-based chips are currently found in a myriad of products including smartphones, tablets, PCs, servers, home appliances, and cars. A company like Apple has started transitioning its whole Mac line to ARM-based Apple Silicon, while Google has recently integrated its own "Tensor" SoC in its brand new Pixel 6 in place of the previous Qualcomm chips seen in previous models. Microsoft is also said to be working on its own ARM chips for future Surface devices, and the company recently hired a veteran semiconductor designer for Apple to bolster its in-house chip efforts.

Nvidia's acquisition of ARM could have a profound impact on the tech industry, and the US Federal Trade Commission sued in December to block the deal. While regulators in other countries have yet to create more roadblocks, Bloomberg reports that the situation has already created some uncertainty within Nvidia. "Some people at the company are resigned to the acquisition’s defeat, but others think management could use the FTC trial to demonstrate the merits of the transaction," the report said.

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