NVIDIA seen pulling the plug on $40 billion ARM deal

Bloomberg heard NVIDIA is quietly moving away from its audacious plan to take over ARM for $40 billion. The deal was announced in September 2020 but was met with a lot of backlash from regulators and NVIDIA's competitors.

The ARM deal faces a lot of issues, including a lawsuit with the FTC that could take months. Furthermore, NVIDIA also has yet to receive the thumbs up from the European Union, the UK, and China. Having failed to convince regulatory authorities, NVIDIA is reportedly no longer expecting the transaction to close. The green team originally expected the deal would close around March of this year -- a timeline that's no longer realistic.

Nvidia has told partners that it doesn’t expect the transaction to close, according to one person, who asked not to be identified because the discussions are private. SoftBank, meanwhile, is stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover, another person said.

If NVIDIA backs away from the deal, it will have been a pricey folly. ARM and SoftBank, which owns ARM, are entitled to keep the $2 billion NVIDIA paid at the signing of the deal, including a $1.25 billion breakup fee.