The 19-year-old is being targeted by clubs in the Bundesliga with his contract expiring in the summer.
Balogun is reportedly frustrated with his lack of playing time at the Emirates, but Arteta says the youngster wants to fight for his place at the club.
"I wouldn't say so," Arteta said. "I think I am pretty positive about it and every time I spoke to him, he mentions the same thing, that he's determined to stay here and he wants to stay here.
"He has some really positive conversations with his agent as well and Edu is in charge of that.
"He's been spending a lot of time and energy to make that deal happen because it's important for us to keep our talent in the house, and what we can guarantee is that we're doing everything we can to keep him."