NVIDIA's $40 billion Arm acquisition now unlikely, says report

NVIDIA GeForce RTX 3070
NVIDIA GeForce RTX 3070 (Image credit: Harish Jonnalagadda / Windows Central)

What you need to know

  • NVIDIA's deal to purchase chipmaker Arm is unlikely to be completed, according to a report.
  • Sources told Bloomberg that NVIDIA has informed its partners that it doesn't expect the transaction to go through.
  • Qualcomm, Microsoft, Intel, Amazon, and other tech giants have opposed the proposed transaction.
  • Several government bodies, including the United States Federal Trade Commission, have also fought against NVIDIA's acquisition of Arm.

NVIDIA's $40 billion acquisition of Arm now seems unlikely to be completed. Multiple sources shared insight with Bloomberg that suggests Nvidia could abandon its fight to get the deal approved by 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," stated another NVIDIA spokesperson in a comment to Bloomberg.

The U.S. Federal Trade Commission (FTC) sued to prevent the purchase of Arm by NVIDIA. China's government has also complicated 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.

Additionally, tech giants have challenged NVIDIA's purchase of Arm. Microsoft, Qualcomm, Intel, and Amazon are part of a group that has pushed against the merger.

The primary concern among 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, customers and have minimal impact on rivals' ability to compete.

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 gearing up an Arm initial public offering (IPO), according to a separate source that spoke with Bloomberg. Rumors of an Arm IPO have swirled since at least July 2021.

While the initial deal to acquire Arm expires on September 13, 2022, it will be automatically renewed if NVIDIA is still working on getting it approved. NVIDIA's initial timeline of the purchase was "approximately 18 months," which would translate (roughly) to 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.

Sean Endicott
News Writer and apps editor

Sean Endicott brings nearly a decade of experience covering Microsoft and Windows news to Windows Central. He joined our team in 2017 as an app reviewer and now heads up our day-to-day news coverage. If you have a news tip or an app to review, hit him up at sean.endicott@futurenet.com (opens in new tab).

  • An IPO would make more sense and will keep ARM neutral as long as it remains relevant.
    Plus it would allow ARM to raise cash to expand as appropriate.
    It would also reveal it's true market value and how much NVIDIA was overpaying for control.
  • The problem is that on an IPO, the company must give revenue for the investors, and ARM receives only royalties from the licensees
  • yet the FTC will allow MS to purchase Activision/Blizzard? WTF
  • Microsoft isn't as big in gaming. Nowhere near monopolistic
  • These are vastly two different scenarios.
  • Indeed.
    Activision isn't essential to anybody in gaming. MS+Activision would still leave hundreds of developers free to compete. And MS wou ld only be third in gaming.
  • As bad as what Microsoft is starting to do, it's nowhere near as bad as Nvidea buying ARM and the implications for the ARM acquisition is miles bigger.
  • That asumes MS cleaning up the Activision cesspool, rescuing dormant IPs, and relaxing the annual cadences is somehow "eee-vile"... On general principle?
    You did hear Activision staff are hopeful, right?
  • What is far more interesting is that microsoft is forking over more cash for a struggling gaming division vs the piddling amount that NVIDIA is paying for ARM.
  • Activision Blizzard is worth more than Arm. More than twice as much.
  • Future value matters.
    Activision is mismanaged and underperforming its potential.
    Meanwhile ARM is at its peak. Keep an eye on RISC-V. Intel is.
  • Cue Mr Burns.Gif *Excellent*.
  • Excuse me but speak for yourself /s bc if my name