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Nvidia's $40bn Arm takeover collapses

Nvidia's headquarters
(Image credit: Wikimedia Commons (Coolcaesar))

The long-planned deal that would have seen US manufacturer Nvidia acquire UK chip designer Arm from Japanese investment business SoftBank has collapsed, both companies reported.

Arm licenses chip technology and architecture to a series of international enterprises and clients, including Samsung, Apple, and Qualcomm, which utilize these to design and create chips for smartphones, computers, and much more. Had the deal gone ahead, Nvidia would have been able to compete at a higher level with rivals Intel and Advanced Micro Devices Inc (AMD) for global chip market share.

Announced in 2020, the cash and stock deal had seen a series of regulatory hurdles that have now resulted in its collapse. Last December, the US Federal Trade Commission moved to block the deal, arguing that if it went ahead, the fast-growing chip sector worldwide would have seen competitive damage.

With chips for self-driving cars and new categories of networking chips just two of the growth markets for chips, and with the worldwide semiconductor shortage causing delays and backlogs, the deal faced further opposition last year from the UK's Competition and Markets Authority (CMA) and the EU.

UK and EU opposition was rooted in concerns regarding price increases, the threat to economies from foreign rivals or private equity, and a market with less choice and lower levels of innovation. Notably, the deal had not yet received Chinese approval, the country having previously denied approval of similar international chip business acquisitions.

In response to the developments, SoftBank relayed that Arm would now be floated on the stock market before the end of the financial year. The Japanese firm is attempting to generate funds due to many portfolio items and investments seeing valuation pressures.

Separately, Arm appointed chip industry veteran Rene Haas as chief executive officer, with Haas having worked for both Arm and Nvidia. His appointment, according to SoftBank chief executive Masayoshi Son, was because the company was looking to "re-enter the public markets" following the deal collapse.

Will Roszczyk
Will Roszczyk

Will is US and Ecommerce Editor at IT Pro, and previously focused on a range of ecommerce verticals across IT Pro Portal, Tom's Guide, and TechRadar Pro. He has over 12 years of B2B experience across both online content and magazine production.