According to a new report from Bloomberg, Nvidia is getting ready to give up on its multi-billion-dollar plan to purchase SoftBank's Arm chipset business.

Instead, SoftBank may file an initial public offering for Arm, according to the report, which cited unnamed officials familiar with the situation.

Nvidia makes chips for a wide range of electronics. Importantly, its stock-heavy deal for Arm has risen in value since it was announced in 2020 due in part to the growth of Nvidia's sales of chips for data centers. Arm, on the other hand, offers chipset designs for a wide range of electronics, including mobile phones.

Figure 1: Nvidia is based in Santa Clara, California.
(Source: Nvidia)

According to Reuters, a Nvidia spokesperson said the company continues to believe the acquisition "provides an opportunity to accelerate Arm and boost competition and innovation." Arm and SoftBank did not immediately respond to requests for comment.

According to Tom's Hardware, Nvidia would owe SoftBank $1.25 billion if its purchase of Arm fails.

The apparent collapse of Nvidia's Arm deal is not necessarily a surprise. US and European regulators have been moving against the transaction. Specifically, in December, the US Federal Trade Commission sued to block Nvidia's purchase of Arm, arguing the deal would stifle competition in the chipset space.

That's noteworthy considering the US Commerce Department just this week released a report warning of a "significant, persistent mismatch in supply and demand for chips." The situation affects a wide range of industries from automotive to telecommunications.

"It's alarming, really, the situation we're in as a country, and how urgently we need to move to increase our domestic capacity," Gina Raimondo, the commerce secretary, told the New York Times.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano