As was expected, Nvidia has ceased its efforts to acquire chipmaker Arm after talks between the two reportedly “collapsed” on Monday, reports the Financial Times.
From the paywalled report:
SoftBank and Nvidia said they had agreed to scrap the deal because of “significant regulatory challenges preventing the consummation of the transaction, despite good faith efforts by the parties.”
As reported late last month, California-based Nvidia was expected to pull out of the deal to acquire the British chipmaker, which is owned by Japanese multinational Softbank, because of its failure to win approval from regulators.
The United States Federal Trade Commission sued to block the deal in December 2021, saying it would stifle innovation and harm competition in the chip market.
In the UK, the government, citing national security concerns, told the country’s Competition and Markets Authority to investigate the takeover of Arm in April. A formal investigation began in November.
The deal could also have had problems with government authorities in China, who are apparently intending to block the takeover if other countries grant approval.
Other tech firms voiced opposition to the deal. Chipmaker Qualcomm announced its opposition to the deal in February 2021, as it expressed concern that Nvidia could end up becoming a gatekeeper for ARM’s technology. Arm licenses its chip designs to more than 500 companies, including Apple and Qualcomm was concerned that Nvidia could prevent rivals from using Arm designs.
Softbank will attempt to divest itself of Arm via an initial public offering before the end of 2022. Sources say that SoftBank prefers the idea of listing Arm in New York and will seek to resist nationalistic pressure.