Nvidia is "quietly" preparing to abandon its $40 billion acquisition of British chip designer Arm, Bloomberg reported on Jan. 25.

Nvidia shares closed down 4.5% on the day. In response to rumors of abandoning the acquisition of Arm, Nvidia responded to China Business News on January 26: "We continue to hold the view detailed in the latest regulatory documents-this deal will provide an opportunity to accelerate Arm and promote competition and innovation."

An insider told China Business News that the news reported by Bloomberg that "Nvidia told partners that the deal is not expected to be finalized in the end" is not true. Nvidia's acquisition of Arm has been closely watched by regulators around the world, who fear it will give Nvidia an unfair advantage in the semiconductor industry.

According to Nvidia's plan, the acquisition of Arm, a British semiconductor company, should be completed in March. However, the deal is still under review by global regulators, and Nvidia is likely to miss the March deadline. The US Federal Trade Commission sued last month to block the deal on antitrust grounds, while UK regulators are investigating the deal, fearing it could pose a threat to national security. Nvidia will also face multiple regulatory hurdles in China.

Earlier this month, Nvidia disclosed a 28-page written document submitted to (CMA), the UK's competition and market authority, setting out the reasons why regulators should approve the company's acquisition of Arm. In the document, Nvidia points out that opponents of the deal have mistakenly "romanticized" Arm's history and exaggerated Arm's market forces. The company said Arm's financial situation was not optimistic and needed more financial support. Capital markets expect Arm to make major strategic changes, including spending cuts and maximizing value.

Arm is widely regarded as a jewel in the crown of the British technology industry. The company's low-power chips are designed for 95 percent of the world's smartphones and 95 percent of chips designed in China, while Arm's chip design is licensed to more than 500 semiconductor manufacturing companies.

The acquisition was opposed by market participants including Intel, Qualcomm, and other giants, who argued that Nvidia's acquisition of Arm would undermine the company's independence and possibly raise prices, thereby limiting competitors' use of Arm patents and hampering innovation in the industry.