NVIDIA’s purchase of Arm now seems unlikely to go through

NVIDIA GeForce RTX 3070Source: Harish Jonnalagadda / Windows Central

NVIDIA’s $40 billion acquisition of Arm now seems unlikely to be completed. Multiple sources shared insight with Bloomberg that suggests that Nvidia could abandon its fight to get the deal approved with regulators. Since the announcement of the purchase, NVIDIA has fought an uphill battle against governing bodies in multiple countries.

One source told Bloomberg that NVIDIA doesn’t expect the transaction to be completed. Publicly, NVIDIA has maintained its stance that it is trying to get the deal to go through.

“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,” said NVIDIA spokesperson Bob Sherbin to Bloomberg.

“We remain hopeful that the transaction will be approved,” added another NVIDIA spokesperson to Bloomberg.

The U.S. Federal Trade Commission (FTC) sued to prevent the purchase of Arm by NVIDIA. China’s government has also fought against the deal. Even if the $40 billion acquisition got over those hurdles, it would need to clear regulatory bodies in the UK and European Union.

Tech giants have also fought against NVIDIA’s purchase of Arm. Microsoft, Qualcomm, Intel, and Amazon are part of a group that has pushed against the deal.

The primary concern amongst tech giants and governing bodies is that if NVIDIA acquires Arm, the resulting company will have too much control over the chip industry. Arm chips are used in a vast range of devices, and companies are concerned that they could lose access to Arm tech if NVIDIA is in charge of it.

NVIDIA argues that purchasing Arm would help, not hinder, Arm customers.

Softbank, the current owner of Arm, is reportedly preparing alternate plans in case the sale of Arm to NVIDIA falls through. Softbank is said to be preparing for an Arm initial public offering, according to a separate source that spoke with Bloomberg. Rumors of an Arm initial public offering have swirled since at least July 2021.

While the initial deal to acquire Arm expires on September 13, 2022, it will automatically be renewed if NVIDIA is still working on getting it approved. NVIDIA’s initial timeline of the purchase was “approximately 18 months,” which would mean roughly March 2022.

If the deal falls through, Softbank and Arm will be able to keep $2 billion, which includes a $1.25 billion fee for the deal breaking down.

Leave a Reply