NVIDIA terminates planned acquisition of Arm

NVIDIA and SoftBank Group (SBG) have announced the termination of the previously announced transaction whereby California-based chip supplier NVIDIA would acquire UK chip designer Arm from SBG. The parties said they agreed to terminate the agreement because of significant regulatory challenges preventing the consummation of the transaction, despite good faith efforts by the parties.

NVIDIA originally announced its intention to acquire Arm back in September 2020, in a transaction valued at $40 billion. The acquisition was planned to bring together NVIDIA’s AI computing platform with Arm’s vast ecosystem to create what was described as the premier computing company for the age of artificial intelligence, accelerating innovation while expanding into large, high-growth markets.

The US Federal Trade Commission (FTC) sued to block the deal in December 2021, claiming it would stifle competing next-generation technologies. This is because the acquisition would give NVIDIA control over the computing technology and designs that rival firms rely on to develop their own competing chips. The FTC’s complaint alleged that the combined firm would have the means and incentive to stifle innovative next-generation technologies, including those used to run data centres and driver-assistance systems in cars. The FTC’s administrative trial was scheduled to begin on 9 August 2022.

With the acquisition now terminated, SBG has announced that, in coordination with Arm, it will start preparations for a public offering of Arm within the fiscal year ending 31 March 2023. However, in accordance with the terms of the original agreement, SBG will retain the $1.25 billion prepaid by NVIDIA, which will be recorded as profit in the fourth quarter, and NVIDIA will retain its 20-year Arm licence.

“Arm is becoming a centre of innovation not only in the mobile phone revolution, but also in cloud computing, automotive, the Internet of Things and the metaverse, and has entered its second growth phase,” said Masayoshi Son, Representative Director, Corporate Officer, Chairman and CEO of SoftBank Group. “We will take this opportunity and start preparing to take Arm public, and to make even further progress.”

“Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come,” added Jensen Huang, founder and CEO of NVIDIA. “Arm is at the centre of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm. The significant investments that Masa has made have positioned Arm to expand the reach of the Arm CPU beyond client computing to supercomputing, cloud, AI and robotics. I expect Arm to be the most important CPU architecture of the next decade.”

Image credit: ©stock.adobe.com/au/vesnafoto

Please follow us and share on Twitter and Facebook. You can also subscribe for FREE to our weekly newsletter and bimonthly magazine.