Reports have suggested that multinational tech giant Nvidia is looking to abandon the deal that would see it takeover UK chip designer ARM.

News site Bloomberg cited people familiar with the deal who said that the company is advising partners that it does not expect to close the deal after it was hit by multiple regulatory roadblocks.

Another source said that SoftBank, ARM’s owner since 2016, is considered launching an initial public offering for the company.

However, they noted that no final decision has been made, with Nvidia still appealing to regulatory bodies.

“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,” Bloomberg cited Nvidia spokesman Bob Sherbin as saying.

The $40-billion deal aimed to combine Nvidia’s AI computing platform with ARM’s chip designs, creating “the premier computing company for the age of artificial intelligence”.

The move would have seen Nvidia take almost full control of ARM, save for its IoT Services Group.

Announced back in September 2020, the Nvidia-ARM deal was expected to be completed within two years. However, its convoluted history makes that seem unlikely.

ARM designs chips that set global standards and can be found in numerous devices, including phones, to manufacturing equipment. As such, a deal would affect numerous sectors, from gaming to data centres and self-driving cars.

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As a holding company, SoftBank, ARM’s previous owner, was not considered a threat to competition. However, since Nvidia and ARM operate in the same industry, concerns grew that Nvidia could limit its competitors’ access to ARM’s chip designs.

Furthermore, the deal raised concerns that ARM’s headquarters could be moved from the UK, with a resulting loss of personnel. A report from the Competition and Markets Authority (CMA) in July warned that the deal could have national security ramifications for the country.

With the CMA finding that the deal could be anti-competitive, the next move was an in-depth report into the deal.

ARM’s clients, such as Apple and semiconductor maker Qualcomm have opposed the deal as well.

Later, the US Federal Trade Commission (FTC) sued to block the deal, citing similar competition concerns. Investigations by the European Commission were paused in November due to a missed deadline.

According to one of the sources, China was expected to block the move as well, should it receive approval in other jurisdictions.

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