Nvidia gives up on buying Arm

Arm is planning a public offering instead

Nvidia’s bid to buy Arm has all but failed. As the company has announced in a public statement, it is terminating the previously planned transaction that would have it acquire chip behemoth Arm from SoftBank, whose chip designs power virtually all of the best smartphones and other mobile devices out there. The businesses are citing “significant regulatory challenges” that prevent them from further pursuing the deal. Instead, Arm is looking to prepare for a public offering as its CEO steps down.

With the deal falling through, SoftBank now wants to go public with Arm. The company will start preparations for this move within the fiscal year ending March 31, 2023, so we might be a good year or so away from Arm going public.

Meanwhile, the company's CEO Simon Segars has resigned from his position for personal reasons, according to Bloomberg. He is replaced by Rene Haas, who is hoping that the end of the troubled sale process will help refocus the company, while reiterating that Arm has never performed better financially.

Bloomberg cited Haas as saying, "It’s going to be taking a company that’s been in stall mode because of the Nvidia acquisition and getting us reinvigorated to move forward. It’s been hard for employees at many companies and then you layer on the uncertainty we’ve had.”

“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. 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.”

Following the preparations of the sale, SoftBank will be able to keep the $1.25 billion prepayment from Nvidia as profit while Nvidia will retain a 20-year Arm license.

When the news first broke that Nvidia wanted to buy Arm, skeptics were quick to point out that the acquisition would leave Nvidia with too much power over both the graphic card business and the mobile chip market, with Arm virtually equipping all current smartphones, tablets, and even M1 Macs with the necessary underlying chip architecture. Many regulators shared the concern, with the EU launching an antitrust probe and the FTC in the US looking into blocking the deal in court.

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