The Gunners are keen to bolster their attacking options ahead of the new season and are understood to have had a fresh bid of £40million for Luis Suarez knocked back by Liverpool.
They have been linked with a host of other forwards, including Real Madrid's Gonzalo Higuain, which could mean that Podolski faces greater competition for regular football at Emirates Stadium.
However, the Germany international says that having a strong squad can only benefit the club and he is more concerned about the team performing well than anything else.
"I'm not scared about big names because it helps the team and will help me when we play together," he said in The Sun.
"Every summer is the same. Players come in and others leave.
"I am always happy to play with the best in the world.
"But it's not about what is good for me, it's about improving the whole team."
Speaking ahead of Friday's friendly with Urawa Reds in Japan, Podolski added: "You have competition at every big club, particularly one the size of Arsenal.
"When all the players are fit, there is big competition here."