Nvidia's nearly two-year-long quest to take over mobile chip giant Arm may be over sooner than expected.
Bloomberg (opens in new tab) is reporting that Nvidia may be winding down efforts to close the $40 billion deal for the British semiconductor company after facing opposition in the U.S., in Europe from the European Union, and from China. Essentially, no one outside of Nvidia, Arm, and Softbank, Arm's current owner, approved the deal.
Softbank, according to the report, might soon prep Arm Holdings for an IPO. TechRadar Pro has reached out to Nvidia for comment and will update this post with its reply.
While Nvidia is primarily known as a graphics company, and Arm produces the underpinning for most of the leading mobile CPUs, the acquisition was tied primarily to Nvidia's Artificial Intelligence aspirations.
“AI is the most powerful technology force of our time and has launched a new wave of computing,” said Nvidia CEO and Founder Jensen Huang in a release when the company's announced the deal in 2020. He added, “In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today’s internet-of-people. Our combination will create a company fabulously positioned for the age of AI."
Now Nvidia might have to realize that AI dream on its own.
Nvidia might've considered fighting on, but it potentially faces even more pushback if the US Department of Justice and Federal Trade Commission successfully alter the ground rules for mergers and acquisitions.
Nvidia abandoning its pursuit of Arm was really the only way this could have ended
Those who've been following the Nvidia / Arm news for some time aren't surprised by the latest developments.
"I wouldn't be surprised if Nvidia pulled the plug given all the regulatory hurdles it needs to overcome," CEO & Chief Analyst at Moor Insights & Strategy Patrick Moorhead told TechRadar Pro.
The deal's potential collapse also changes the mobile chip playing field where Arm is confronting fresh competition from companies it could once rely on as customers. Samsung, Microsoft, and Apple have all been developing their own silicon.
"I believe as a standalone company, Apple will have less competition from Arm as I don't think it will be able to invest as much being a public company," said Moorhead.
While Softbank might be preparing an IPO, there is the potential of another suitor, one that might realize similar synergies. However, Moorehead doesn't see things playing out that way. Samsung, for instance, would receive similar pushback from regulatory bodies, Moorhead told us.
Ultimately, the deal's potential demise might be a lost opportunity for fresh competition in the desktop space, where right now Intel's x86 platform still rules the roost. Moorehead told us that he sees Arm surviving but, "I think [Arm] could have done more integrated with Nvidia, especially in the desktop and server market. Where's the competition in those markets? NVIDIA would have brought that competition."
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