NVIDIA might abandon ARM acquisition due to regulatory hurdles
While NVIDIA announced plans to acquire UK-based chip designer ARM all the way back in September 2020, the company hasn’t managed to close the deal due to regulatory hurdles. Shortly after the announcement, several major companies, including Qualcomm, Microsoft, and Google, raised concerns about NVIDIA’s acquisition of ARM, claiming that the deal would harm competition in the industry by giving NVIDIA complete control of ARM’s chip designs. As a result, regulators from the EU, US, UK, and China have opened antitrust investigations into the acquisition.
Although NVIDIA has promised that it will maintain ARM’s current neutral licensing model following the acquisition, it has failed to convince regulators so far. Due to this, the company is now preparing to abandon the deal, according to people familiar with the matter. Bloomberg notes that NVIDIA has “told partners that it doesn’t expect the transaction to close” while SoftBank, ARM’s current owner, is “stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover.” However, NVIDIA and ARM’s leadership are yet to reach a decision and are still pleading their case to regulators.
When asked about this new development, NVIDIA spokesperson Bob Sherbin told Bloomberg that the company continues to “hold the views expressed in detail in our latest regulatory filing — that this transaction provides an opportunity to accelerate Arm and boost competition and innovation.” A SoftBank spokesperson further added that the company remains “hopeful that the transaction will be approved.”
For the unaware, NVIDIA’s acquisition of ARM is under heavy scrutiny because the latter’s chip designs are used in almost everything from phones to cars. ARM currently operates under an open-licensing model and provides its chip designs to any company in any industry, across the world. While NVIDIA claims that it will maintain the same model following the acquisition, tech giants who rely on ARM technology fear that things might change under NVIDIA.