NvidiaIs “quietly” planning to cancel its $40 billion acquisition by British chip designer Arm Bloomberg News reported Tuesday.

According to news agencies, the U.S. chipmaker informed partners that it does not expect the deal’s completion, according to people who are familiar with the matter. SoftBankBloomberg reports that Arm is currently owned by a company called ‘Arm, Inc., and they are making preparations to make Arm public to replace the Nvidia acquisition.

“We continue to hold the views expressed in detail in our latest regulatory filings — that this transaction provides an opportunity to accelerate Arm and boost competition and innovation,” a Nvidia spokesperson told CNBC by email.

CNBC reached SoftBank and Arm but were unable to reach them immediately.

Nvidia shares declined by approximately 3% in U.S. premarket trades.

Global regulators have been closely monitoring the agreement, concerned that Nvidia would gain an unfair edge in the semiconductor market.

Last month, the U.S. Federal Trade Commission sued to block the transactionBritish regulators have been criticized for their antitrust policies, but they are supportive of British competition law. probing the deal over concerns it would pose a threat to national security. Nvidia faces also multiple regulatory obstacles in ChinaArm is a partner in a joint venture between Hopu Investments and private equity firm Hopu Investments.

Arm is often referred to by many as the “crown Jewel” of the U.K.’s tech industry. Arm’s efficient chip architectures, which are energy-efficient, is used in 95% worldwide smartphones. It also makes 95% of chips made in China. It makes its money by paying manufacturers royalties.

Read the complete Bloomberg report here.

This report was written by Sam Shead of CNBC