NVIDIA Gives Up On its $40 Billion Acquisition of Arm
- Laurent Giret
- Feb 08, 2022
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NVIDIA has abandoned its plans to purchase chip designer Arm Ltd. from SoftBank. A previous report from Bloomberg suggested that the $40 billion deal may fall through due to regulatory scrutiny, and this has now been confirmed by NVIDIA and Arm owner SoftBank Group today.
“NVIDIA and SBG have agreed to terminate the agreement on February 8, 2022 because of significant regulatory challenges preventing the consummation of the Transaction, despite good faith efforts by the parties,” SoftBank wrote in the press release. The Japanese company will receive $1.25 billion from NVIDIA due to the deal falling through, and SoftBank Group also announced today a new plan for a public offering of Arm within the fiscal year beginning on April 1.
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According to a report from TechCrunch, Arm CEO Simon Segars is also leaving the company and will be replaced by Rene Haas, the current president of Arm’s Intellectual Property Group. Notably, Haas is also a former VP and General Manager of NVIDIA’s Computing Products Business Unit.
The Arm brand may not sound very familiar to the general public, but the company actually plays a key role in the tech industry as its chip designs can be found in smartphones tablets, PCs, servers, cars, and many other products. A leading GPU manufacturer such as NVIDIA taking control of Arm would have had serious consequences for Arm customers which include Microsoft, Google, Apple Qualcomm, Samsung, and many other high-profile tech companies.
Since NVIDIA announced its plan to acquire Arm back in September 2020, the company faced various hurdles starting with the UK government threatening to intervene on national security grounds (Arm is a UK-based company). After the US Federal Trade Commission sued to block the acquisition back in December 2021, it seemed like the writing was already on the wall.
If NVIDIA won’t be spending $40 billion to acquire Arm, the two companies will keep collaborating closely going forward. “Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come,” said Jensen Huang, founder and chief executive officer of NVIDIA. “Arm is at the center of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm.”