Nvidia has officially announced that it will not be buying UK-based chip designer Arm. The former was set to complete its purchase of Arm from Japanese conglomerate SoftBank Group Corp. (SBG) in a multi-billion dollar deal this year. The sale has fallen through owing to antitrust concerns voiced by regulatory authorities in the US, the UK and Europe.
When Nvidia revealed plans to acquire Arm from SoftBank in 2020 via a cash and stock purchase, the transaction was thought to be valued at a little over $40 billion. This announcement raised alarm bells in the industry since it could potentially give Nvidia an edge over competitors to whom Arm licenses its chip designs.
Arm architecture powers most mobile and desktop processors the world over including those belonging to Qualcomm, AMD, Apple and Intel. The all-round view was that allowing Nvidia to buy Arm would enable it to wield too much power in the chip market and stifle competition. There were fears that it might even be able to spy on rival products in the development stage.
The sale, which was supposed to be one of the largest ever in the semiconductor industry, collapsed after Nvidia and SBG failed to convince regulators that this wouldn’t harm Arm’s open licensing model. The Federal Trade Commission (FTC) in the US sued to halt the acquisition in December 2021. Even authorities in the UK and China have been probing the deal.
As of 7th February 2022, Nividia and SoftBank declared that the arrangement has been terminated. SBG gets to keep the down payment of $1.25 billion that it received from the former as part of the agreement. There are plans to take Arm public within the next 12 months, though it’s not clear whether it’ll be listed on the London Stock Exchange or the New York Stock Exchange.
Meanwhile, Arm CEO Simon Segars has stepped down from his position. Rene Haas, who has served as president of the company’s IP Products Group since 2017, will take his place. Haas spent seven years at Nvidia as vice president and general manager of its computing products division.