Nvidia’s headquarters in Santa Clara, California, on Tuesday, February 23, 2021.

David Paul Morris Bloomberg | Getty Images

Nvidia’s planned acquisition of Arm by SoftBank failed due to “significant regulatory challenges”, the companies said in a joint statement on Tuesday.

The deal was originally announced in 2020 and currently has a value of $ 40 billion in shares and money from Nvidia.

SoftBank said Arm will now be preparing for public offering within the fiscal year ending March 31, 2023.

Arm is creating a technology that is at the heart of every smartphone processor, including Apple’s iPhone and Android devices running Qualcomm chips. It counts almost every major semiconductor company as a customer.

The deal has been under scrutiny since it was announced. Arm, a British company, is a neutral supplier to several competing technology giants. Qualcomm and Microsoft used Arm’s core technology, its set of instructions, and publicly opposed the deal.

In December, the US Federal Trade Commission filed a lawsuit to block the deal on antitrust considerations. Last year, the competition authorities in the United Kingdom announced an investigation into the sale.

Semiconductor and technology companies fear that if Nvidia owns Arm, it may prefer its own business to its customers, who may have no alternative to ARM technology.

“The proposed vertical deal will give one of the world’s largest chip companies control over computing technologies and designs that competing companies rely on to develop their own competing chips,” the Federal Trade Commission said in December.

SoftBank said the $ 1.25 billion deposit it received as part of the deal is non-refundable and will be recognized as a gain in the fourth quarter of the fiscal year ending March 31, 2022.

Arm was independent until 2016, when SoftBank Group bought it for $ 32 billion.

Nvidia has previously said it expects the deal to close this year.

Changing the hand guide

Arm CEO Simon Segars resigned and was replaced by Rene Haas with immediate effect.

“Rene is the right leader to accelerate Arm’s growth as the company begins to prepare to re-enter public markets,” said Masayoshi Son, CEO of SoftBank Group.

Haas has been President of the Arm IP Products Group since 2017. Under his leadership, the company focuses on products for emerging markets such as the automotive industry.

Arm said in a statement that it is on track to achieve record royalties, license revenues and profits in the current fiscal year, which ends in March.

Arm was founded in Cambridge in 1990 as a joint venture between several companies, including Apple. It focuses on low-power chips, which have gained new prominence in the last decade, as the rise of smartphones has meant that CPU efficiency is becoming increasingly important over the superior raw CPU power of chips made by companies such as Intel.