Report: NVIDIA Preparing to Abandon Takeover of Arm

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NVIDIA is supposedly giving up its high-profile and oft-reported plan of acquiring British semiconductor and software design giant Arm Ltd.

The headline stems from Bloomberg, which shared a report this morning from sources who claim that NVIDIA does not expect the transaction to close, with SoftBank Group, the current owner, considering an initial public offering for Arm. While no final decisions have been made by either company, the deal could very well fall through due to the roadblocks that have been set in NVIDIA’s way, which include the FTC’s decision to sue the company for its plan to acquire one of the largest chip companies back in December.

“The purchase — poised to become the biggest semiconductor deal in history when it was announced in September 2020 — has drawn a fierce backlash from regulators and the chip industry, including Arm’s own customers,” Bloomberg explained. “The U.S. Federal Trade Commission sued to stop the transaction in December, arguing that Nvidia would become too powerful if it gained control over Arm’s chip designs.”

“The sale of Arm is under heavy scrutiny because its chip designs are used in everything from phones to cars to factory equipment, making neutrality the foundation of its business model. The world’s biggest tech companies rely on Arm technology, and they fear they could lose unfettered access under Nvidia.”

NVIDIA announced its intention to acquire Arm Ltd. for $40 billion on September 13, 2020, as part of a plan to accelerate innovation and create the world’s premiere company for the age of artificial intelligence. The agreement that NVIDIA made with Softbank was originally expected to complete in March of this year, but that is clearly no longer happening.

Source: Bloomberg

Tsing Mui
News poster at The FPS Review.

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