According to sources, NVIDIA is preparing to abandon the deal because of little to no progress in gaining regulatory approval. A person familiar with the matter said that SoftBank is working on a program to take ARM public as an alternative to the acquisition.
The deal was announced in September 2020, with CEO Jensen Huang proclaiming that it would create a company that was " fabulously positioned for the age of artificial intelligence".
There was a backlash after the announcement. The UK launched an antitrust investigation into the acquisition in January of 2021. In the US, the FTC recently sued to block the purchase over concerns it would stifle competition in industries like data centers and car manufacturing. If other regulators don't approve the transaction, China would block it.
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.
Sources say that companies like Intel, Amazon and Microsoft have given regulators enough information to kill the deal. They argued that the independence of the client is at stake. It could potentially become a supplier and a competitor to the licensees.
Both companies maintain that they are pushing forward despite the challenges.
While the Semiconductor industry is so hot, some people at Softbank are pushing for an ARM IPO as an alternative to the acquisition. The transaction price has increased since it was announced, and others in the company want to continue pursuing it.
If approvals take longer, the initial agreement will be automatically renewed. The transaction was predicted to close in 18 months, but now it seems like it won't happen at all.