James Martin / CNET

SoftBank and Nvidia announced on Tuesday that they had terminated their deal to sell chipmaker Arm to Nvidia, citing “regulatory challenges” as a factor in the decision. The acquisition was expected to be worth $ 40 billion, a deal described as the largest ever in the chip industry.

SoftBank said it now plans to hold an IPO for Arm in 2023, according to events reported earlier by the Financial Times on Monday. The IPO is estimated at about $ 80 billion.

“Arm has a bright future and we will continue to support them as a proud licensee for decades to come,” Nvidia CEO Jensen Huang said in a statement. “Although we will not be one company, we will partner closely with Arm.”

Japanese technology giant SoftBank agreed to sell Arm to Nvidia in September 2020, but struggled to gain regulatory approval. The US Federal Trade Commission has filed a lawsuit to block Nvidia’s takeover, arguing it would harm competition, and the UK government has launched an investigation into the deal.

Arm is not as well known as chipmakers Qualcomm and Intel, but its work is behind processors in many mobile phones around the world because it licenses chip design and related technologies from companies such as Apple, Samsung and Qualcomm.

SoftBank bought the UK-based Arm in 2016 for $ 32 billion with the intention of strengthening its Internet of Things division. Nvidia has said it expects the relationship to boost its ambitions for artificial intelligence.

Arm also announced that Simon Segars will step down as CEO and board member, and President Rene Haas will take over.