Nvidia to abandon $40 billion bid for Arm as Softbank prepares Arm IPO

Nvidia is preparing to abandon its purchase of Arm Ltd. from SoftBank after making little to no progress in winning approval for the $40 billion chip deal, Bloomberg News reports, citing “people familiar with the matter.”

Arm Ltd. logo

Ian King, Giles Turner, and Peter Elstrom for Bloomberg News:

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. SoftBank, meanwhile, is stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover, another person said.

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. 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.

MacDailyNews Take: As we wrote back in September 2020, “This is a long way from being a done deal as the regulatory approvals are numerous.”

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