Nvidia’s attempt to purchase Arm for $40 billion is dead due to “significant regulatory challenges,” reported early Tuesday by both Nvidia and SoftBank Group, the owner of Arm.
SoftBand and Arm will immediately begin starting preparations for a public offering with hopes of completing the IPO in a year. Arm also announced the appointment of Rene Haas to succeed Simon Segars as Arm CEO. Haas had been serving as president of the Intellectual Property Group at Arm for the past five years.
SoftBank will keep the $1.25 billion Nvidia prepaid under the terms of the initial deal reached 17 months ago, while Nvidia will retain its 20-year Arm license for access to processor designs and related architectural plans.
Nvidia CEO Jensen Huang said Nvidia will continue to “partner closely with Arm,” as SoftBank has positioned Arm beyond CPUs for client computing to supercomputing, cloud, AI and robotics. “I expect Arm to be the most important CPU architecture of the next decade,” Huang said in a statement.
SoftBank CEO Masayoshi Son praised Nvidia and Huang for the effort in trying to bring Nvidia and Arm together and said Arm has entered a second growth phase. “We will take this opportunity and start preparing to take Arm public, and to make even further progress.”
In January, reports surfaced that the deal would fall through, although both Nvidia and SoftBank held firm. One of the biggest regulatory blows came from the U.S. Federal Trade Commission, which sued in December to block the merger on antitrust grounds. “The proposed vertical deal would give one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips,” The FTC said Dec. 2.
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