Nvidia has begun to tell partners that it does not expect its attempted acquisition of Arm to close.
The GPU-maker is prepping to abandon the deal following intense pushback by regulators around the world, Bloomberg reports.
Nvidia announced its intention to acquire the licensor of the world's most popular chip architecture back in September 2020. At the time the deal was worth $40 billion, but that value has jumped by tens of billions due to the rise in Nvidia's share price.
But the deal immediately came under regulator scrutiny, with rivals and customers lining up to denounce the acquisition.
With Arm based out of the UK, British regulators would need to approve the deal - but have instead launched an in-depth probe and said that the acquisition would be bad for the data center sector.
The European Commission has equally highlighted the risk to data centers, and is in the midst of a lengthy investigation. Over in China, regulators have dragged their feet amidst growing US-China tensions - and at the same time, Arm's Chinese division is in open revolt.
Perhaps worst of all, the US Federal Trade Commission has sued to stop the acquisition, arguing that it would be bad for competition.
All this has led many at Nvidia to prepare for defeat, although Bloomberg reports that some hope to use an FTC trial to argue their case.
Should the deal collapse, SoftBank and Arm will keep the $2 billion Nvidia paid at signing.
The Japanese telco SoftBank bought Arm in 2016, but is looking to cash out - Nvidia claims that it was approached by Arm, not the other way around.
If the purchase fails, SoftBank is preparing to take Arm public, and is thought to be encouraged by the overall boost in chip stock prices amid the pandemic and semiconductor supply crisis.