comscore Nvidia’s ARM deal scrapped: Here’s what we know about it

No, Nvidia is not acquiring ARM now

SoftBank said that ARM will instead start preparation for an IPO in the fiscal year beginning on April 1, 2023.

Nvidia Arm deal

(Image: Nvidia)

US-based graphics giant will no longer be spending $40 billion in acquiring UK-based ARM from SoftBank amid rising scrutiny from the regulators. The news was first reported by Financial Times and then confirmed by SoftBank. As a part of the agreement, Nvidia will be paying a sum of $1.25 billion to the ARM parent SoftBank for failing to go through with the transaction. Also Read - Google launches three Chromebooks dedicated for cloud gaming: Check price, specs, features

“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 announced. Also Read - Microsoft lays off employees from customer-focused R&D projects: Report

SoftBank said that ARM will instead start preparation for an IPO in the fiscal year beginning on April 1, 2023. Also Read - Google, Meta, Apple, Spotify and more: Why tech companies are slowing down hiring

The deal’s collapse also prompted a change in ARM’s leadership. ARM, which was acquired by SoftBank in 2016 for $32 billion, promoted Rene Haas as the chief executive officer and member of the board of directors. Haas will be replacing Simon Segars, who has been working with the company in various capacities for almost 30 years. Segars, on the other hand, will assume an advisory role for Arm.

Nvidia hasn’t commented on the matter so far.

Notably, Nvidia had first announced its acquisition of ARM from SoftBank for $40 billion back in 2020. At the time, the company said that ARM would remain headquartered in the UK and that it would operate as a division of Nvidia under its existing licensing model “while maintaining its global customer neutrality.”

However, the deal has faced several regulatory hurdles ever since it was announced. The US Federal Trade Commission sued to block the deal last year arguing that it would stifle competition in emerging markets such as chips in self-driving cars among other things. Additionally, the deal faced intense scrutiny from the British and EU regulators who cited concerns that it could increase prices and reduce innovation and options in the chip market. They also launched a probe in the deal last year.

  • Published Date: February 8, 2022 2:11 PM IST
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