Nvidia May Abandon $40 Billion Arm Acquisition — Report

Nvidia might be relin­quish­ing its efforts to pur­chase semi­con­duc­tor mak­er Arm, after fac­ing a num­ber of hur­dles by regulators–according to the newest report on the matter.

A Bloomberg arti­cle cites sources in Nvidia–who are privy to the information–say they the com­pa­ny has plans to aban­don the $40 bil­lion acqui­si­tion. Nvidia announced plans to pur­chase Arm from cur­rent own­ers Soft­Bank in Sep­tem­ber 2020. The deal was expect­ed to close with­in 18 months. Nvidia may be strug­gling to do close this deal, due to the strong oppo­si­tion seen from the FTC. The report states that Nvidia has already begun inform­ing part­ners that the acqui­si­tion won’t close.

The FTC announced last year it was suing Nvidia over the Arm acqui­si­tion, say­ing it was anti-com­pet­i­tive. Arm sup­plies chip design to a num­ber of com­pa­nies, includ­ing Nvidia com­peti­tors AMD and Intel. Its chip designs are also used in large serv­er instal­la­tions, which are rolled out by Microsoft and Ama­zon, each of which could con­sid­er Nvidia a com­peti­tor as it ramps up its efforts into machine-learn­ing for indus­tri­al pur­pos­es. Of course, this makes it a bit iffy for Nvidia, who are say­ing they won’t inter­fere with competition.

Even if Nvidia man­ages to leap over the FTC law­suit hur­dle, it still faces scruti­ny from both the UK and EU. Anti-trust orga­ni­za­tions have already made it clear they intend to inves­ti­gate the deal fur­ther, if it makes it that far. The Chi­nese gov­ern­ment also men­tioned its own oppo­si­tion to the deal, giv­en this would make Nvidia a major com­peti­tor to its own export­ed semi­con­duc­tor business.

While both Nvidia and Soft­Bank are pub­licly con­tin­u­ing to sup­port the deal and show­ing con­fi­dence that it will close, Soft­Bank could be prepar­ing an ini­tial pub­lic offer­ing (IPO) for Arm should this deal fall through. Soft­Bank will retain the $2 bil­lion sign­ing bonus and an addi­tion­al $1.5 bil­lion break-up fee.

Nvidia has yet to con­firm or deny the Bloomberg report. Sim­i­lar anti-trust claims of anti-trust breach­ing con­duct were thrown at Microsoft last week after the com­pa­ny announced plans to acquire Activi­sion Bliz­zard over the next 18 months.