The sale of Arm to Nvidia will not go ahead. Nvidia decided to do so in consultation with tech investor Softbank, the owner of Arm. The reason for the cancellation is the difficulties in getting approval from regulators. The plan is now to take Arm public because Softbank does not want to remain the owner of Arm. Arm will also get a new CEO effective immediately.
Nvidia reached an agreement with Softbank to acquire Arm in September 2020. It was a 40 billion dollar (approximately 35 billion euro) deal. Nvidia wanted to strengthen its focus on AI with the acquisition. “In the coming years, billions of computers with AI will create a new Internet of Things thousands of times larger than the current Internet of People,” CEO Jensen Huang said at the time.
Arm makes the basic architecture for many processors, including IoT and AI devices. Its designs are also used for processors in iPhones, Macs, and Samsung smartphones. For this, an open licensing model and neutrality are essential.
Regulators, however, feared that the takeover by Nvidia would lead to less choice and innovation, while higher prices were also expected. Authorities in Europe, the United Kingdom and the United States did not seem to approve the acquisition. China also wanted to research the takeover, which delayed the approval. That country has previously obstructed international chip takeovers.
Initial public offering
Softbank would receive compensation of USD 1.25 billion for cancelling the deal. The tech investor is still planning to sell Arm, this time through an IPO. The IPO must be completed by March 2023.
Arm will also have a new CEO in chip veteran Rene Haas. Haas has been with Arm since 2013 and previously built up experience at Nvidia. Softbank sees Haas as a leader who can realise growth and at the same time supervise the IPO. The outgoing CEO, Simon Segars, has decided to leave Arm. The time and energy needed to bring a company to an IPO is not something he wants to do.