NVIDIA’s plan to acquire chip designer Arm Holdings is dead. The companies announced the deal a year and a half ago, but since then it’s come under heavy scrutiny from antitrust regulators around the globe, and now NVIDIA and Arm’s parent company Softbank say they’ve terminated the agreement.
At the same time, Softbank is unveiling new plans for Arm. It’s appointed a new CEO for Arm and announced plans to take the company public by March 31, 2023.
Arm doesn’t make its own processors, but the company designs chip architecture that’s licensed by makers of virtually every smartphone on the market today as well as many other devices including consumer electronics, servers, and even recent laptop and desktop computers like Apple’s latest Macs with Apple Silicon chips (which are based on Arm technology).
Not surprisingly, many chip makers were immediately skeptical when a rival chip maker (NVIDIA) announced it wanted to buy Arm, but would not give its own chips preferential treatment in any way. And it seems like antitrust regulators in the US, Europe, China, and other regions were also concerned.
With the chances that the deal would survive that level of scrutiny looking slim to none, Softbank and NVIDIA decided to go another route. NVIDIA will continue to hold a 20-year license for Arm designs and Softbank will get to hold onto $1.25 billion that was pre-paid by NVIDIA.
Japanese company Softbank acquired the UK-based Arm Holdings in 2016 for $32 billion with an announcement that it would pump money into the company to grow Arm’s global business. According to Reuters, Softbank would have received around $12 billion in cash and up to $50 billion worth of NVIDIA stock if the sale had gone through as proposed… but with the deal falling apart, Softbank will have to look for other ways to raise money. And it looks like the company is hoping a public offering will do that.
Arm’s new CEO who will help lead that initiative is Rene Haas, who’s been working in the chip industry for more than three decades, including 7 years as a vice president at NVIDIA and, most recently, 8 years on Arm’s executive team.