Nvidia CEO Jensen Huang in an interview with The Financial Times admitted to expected delays to the Nvidia-Arm acquisition deal - the result of regulatory scrutiny over the $40 billion (cash and stock) merger. “Our discussions with regulators are taking longer than initially thought, so it’s pushing out the timetable,” Huang told The Financial Times. “It’s not one particular delay,” he added. “But we’re confident in the deal, we’re confident regulators should recognize the benefits of the acquisition.”
The initial 18-month timeframe agreed between Nvidia and Arm-owner Softbank for the deal's push and conclusion was set to end on March 2022 - with an optional, extended deadline pushed into September 2022. The March deadline has apparently come and gone - Jensen Huang's interview with The Financial Times at least suggests that Nvidia doesn't think the remaining regulatory hurdles can be cleared that soon.
Part of the blame may lay with Nvidia, though, and not only with regulatory bodies: the company still hadn't submitted the required documentation to the European Commission which was due in July. Summer holidays mean that Nvidia will now have to wait until September at the earliest to submit the deal, which shaves some precious months from the available timeframe for the deal's conclusion, and could theoretically jeopardize it. In addition, Nvidia only submitted documentation to Chinese regulatory authorities in June - eight months after the announcement of the Arm acquisition, and towards a regulatory body who Chinese law specialists say could take around 18 months to come to a decision. Curiously, Chinese regulatory authorities can already count on one high-profile victim of their antitrust policies: three years ago, Qualcomm attempted to purchase NXP for a cool $44 billion, but the deal failed after crossing the 18-month (plus a three month extension) deadline set by the two companies.
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The Nvidia-Arm deal shook the tech industry when it was announced; Arm's overall posture of neutrality when it comes to its technology has most industry players opposing the Nvidia acquisition, on the grounds of prospective monopolization of Arm's technology. The United Kingdom, where Arm was founded, is also creating barriers and speed bumps towards the deal's conclusion - the Arm acquisition has been thoroughly politicized, becoming a banner on the UK's continued loss of technological influence and corporate leadership in the face of continued foreign acquisitions of UK assets. Threats to the UK's national security that could result from the Arm acquisition have also been thrown in the mix for good measure.
Whichever way the deal goes, both Arm and its holder Softbank are very likely to come out of this acquisition attempt stronger than ever. Arm-based products continue to carve their way into previously x86-exclusive waters, including supercomputers and laptops, are being explored in novel manufacturing techniques that might open up a market that's being attentively called The Internet of Everything. On top of that, Softbank and Arm seem to have been mulling over a backup plan should the NVIDIA deal grow stale: instead of a full Arm sale, the companies are eyeing an IPO, taking advantage of increased Arm valuation.
