On Tuesday, Bloomberg released a message that people familiar with the matter revealed that Nvidia is ready to abandon the $40 billion acquisition of Arm due to almost no progress in obtaining approvals. Nvidia has told partners that it does not expect the deal to be completed, and SoftBank is seizing the time to prepare for ARM's initial public offering and look for a new Arm successor.
In September 2020, Nvidia and SoftBank issued a statement announcing that Nvidia would acquire Arm, a chip IP company owned by SoftBank, for $40 billion, the largest merger ever made in the semiconductor industry.
Despite Nvidia's pledge to continue to operate Arm as a separate subsidiary, using a "customer neutral" and "open licensing" model, the merger was opposed by almost everyone except Arm, Nvidia and SoftBank. Arm co-founder Herman Hauser commented on the deal, arguing that it would be an absolute disaster for Cambridge, the UK and Europe, and that Nvidia would destroy Arm's business model and have a negative impact on more than 500 companies.
On December 2, 2021, the U.S. Federal Trade Commission (FTC) announced a lawsuit to block Nvidia's acquisition of Arm, citing as many as 120 allegations against the acquisition.
In response, Nvidia, Arm and SoftBank also struggled to resist, filing a 49-page defense against the FTC's lawsuit, bluntly saying that Arm faces major challenges in finding future growth, and the largest source of revenue in its original market has been saturated.
For now, though, the 49-page defense doesn't work, and the semiconductor industry's biggest merger will end in failure.
An industry insider told Leifeng network that Nvidia did not really want to acquire Arm, but just wanted to use Arm to hype up, just as SoftBank earned far more capital in the market than it originally acquired Arm through the acquisition of Arm.
The industry insider listed three reasons: the first acquisition of Arm would destroy Arm's neutrality, and the gold lump would become a mud lump; the second Nvidia would not have any difficulty in obtaining Arm's technology; and the third Nvidia had abundant cash flow.
In the past 5 years, Nvidia's stock price has soared 20 times, and when Nvidia announced the acquisition of Arm, the stock price also rose. Today, NVIDIA has a market capitalization of more than $500 billion, becoming the second largest semiconductor company in the world by market capitalization, after TSMC. Perhaps, for NVIDIA at this stage, whether it can pocket Arm is not so important.