Is Nvidia set to abandon its acquisition of Arm?

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According to reports from Bloomberg Nvidia is preparing to abandon its purchase of UK chip designer Arm, after struggling to win approval for the deal.

Bloomberg is reporting that Nvidia is preparing to abandon its purchase of the chip company after making little to no progress in winning approval for the $40bn chip deal.

According to sources Nvidia has told partners that it doesn’t expect the transaction to close. SoftBank is now said to be stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover, according to another source.

The purchase, which if it goes ahead will be the biggest semiconductor deal in history, has drawn a backlash from regulators and the chip industry, including Arm’s own customers. The US Federal Trade Commission sued to stop the transaction in December, arguing that Nvidia would become too powerful if it gained control over Arm’s chip designs.

The acquisition also faces resistance in China, where authorities are inclined to block the takeover if it wins approvals elsewhere.

The deal for the chip designer is also facing scrutiny in the UK where in November last year, the government ordered an in-depth investigation that could result in the deal being blocked.