Nvidia Likely Pulling Out of Arm Acquisition After Failing to Win Regulatory Approval

Nvidia is no longer planning to acquire chip maker Arm after failing to win approval for the venture, reports Bloomberg. Nvidia will "quietly" abandon the purchase because it has made no progress in gaining support from regulators and is facing an FTC lawsuit blocking the deal.

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Nvidia in September 2020 announced plans to purchase Arm from SoftBank for $40 billion, but it was clear from the beginning that the purchase would be subject to regulatory scrutiny as Nvidia is a customer of Arm and Arm has many licensing deals with Nvidia competitors.

In December 2021, the United States Federal Trade Commission filed a lawsuit to prevent Nvidia from acquiring Arm as the purchase would give Nvidia control over computing technology and designs that rival firms rely on to develop competing chips. The FTC said that allowing the acquisition to move forward would stifle "innovative next-generation technologies" and would "unfairly undermine" Nvidia's competitors.

Chipmaker Qualcomm was one of the Nvidia competitors that objected to the purchase, and in February 2021, the San Diego-based company told the FTC, the European Commission, the UK Competition and Markets Authority, and China's State Administration for Market Regulation that the acquisition would allow Nvidia to become the gatekeeper for Arm's technology, preventing other chipmakers from using it.

With the deal looking unlikely to be approved, Nvidia is now telling partners that it does not expect the transaction to close. SoftBank is preparing for an initial public offering in case the Nvidia takeover does not happen, but Bloomberg says that both companies are continuing to speak with regulators at this time in the hopes that something might change.

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Top Rated Comments

thedocbwarren Avatar
53 months ago
This is a good move honestly. End of the day ARM will be used widely and will continue to sustain independently.
Score: 11 Votes (Like | Disagree)
DaRev Avatar
53 months ago

Queue homers saying Apple should buy them.

Because you know, Apple is entitled to everything.
Why would Apple need to buy them, they already bought an Architecture License allowing them access to all future upgrades.
Score: 11 Votes (Like | Disagree)
turbineseaplane Avatar
53 months ago
Good.
We need a lot less consolidation, not more
Score: 9 Votes (Like | Disagree)
KPOM Avatar
53 months ago
Not surprising. Too many regulators had anti-trust concerns. To even think of getting approval they would have had to make so many concessions I doubt the numbers would have made sense.
Score: 7 Votes (Like | Disagree)
Zdigital2015 Avatar
53 months ago

Queue homers saying Apple should buy them.

Because you know, Apple is entitled to everything.
Apple would likely face the exact same type of regulatory scrutiny that NVIDIA is facing, which makes this a non-starter for them. It’s in everyone’s best interest that Arm stay independent of any chipmakers or very large tech companies (Google, Facebook, Apple, Amazon), but I wonder if they have the business acumen to keep their model sustainable in the current environment. What might be viable, although a political nightmare, would be for the parties most interested in Arm’s success forming a consortium that then in turn purchases Arm. This could work.
Score: 7 Votes (Like | Disagree)
turbineseaplane Avatar
53 months ago

Why would Apple need to buy them, they already bought an Architecture License allowing them access to all future upgrades.
You’re applying logical thinking..

The implication here is that the Apple homers often do not
Score: 7 Votes (Like | Disagree)