NVIDIA Walks Away From Arm Acquisition Plans, with SoftBank Opting to Take the Company Public

NVIDIA has announced it is dropping its plan to acquire Cambridge-based chip specialist Arm, walking away from a deal originally valued at $40 billion in stocks and shares — with Arm set to go public under new leadership as a result.

NVIDIA announced its intention to purchase Arm from current owner SoftBank in September 2020, offering what was at the time a stock and share deal valued at $40 billion. The idea, NVIDIA said, was to create "the premier computing company for the age of AI" by combining NVIDIA's graphics accelerator line with Arm's CPU and accelerator IP.

It's a deal that made sense, at least from NVIDIA's perspective: The company already uses Arm IP in a range of its products, not least of which is its Jetson family of embedded edge-AI systems. The company's competitors, however, were concerned that NVIDIA acquiring Arm would bring up issues of monopoly — and the deal became bogged down in regulatory investigations.

Now, NVIDIA has confirmed it is walking away from the planned acquisition. "Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come," claims NVIDIA's founder and chief executive Jensen Huang.

"Arm is at the center of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm. The significant investments that Masa [Masayoshi Son, chair and chief executive officer of SoftBank] has made have positioned Arm to expand the reach of the Arm CPU beyond client computing to supercomputing, cloud, AI and robotics. I expect Arm to be the most important CPU architecture of the next decade."

SoftBank, meanwhile, has abandoned plans to sell Arm off to a single bidder, and has instead announced it will be taking the company public instead. "Arm is becoming a center of innovation not only in the mobile phone revolution, but also in cloud computing, automotive, the Internet of Things and the metaverse, and has entered its second growth phase," claims Son.

"We will take this opportunity and start preparing to take Arm public, and to make even further progress. I want to thank Jensen and his talented team at NVIDIA for trying to bring together these two great companies and wish them all the success."

The cancellation of the deal has cost NVIDIA $1.25 billion in prepaid funds, which will be retained by SoftBank. It would also appear to have triggered calls for a change of leadership: Chief executive officer and board member Simon Segars has stepped down from both roles, to be replaced with immediate effect by Rene Haas.

"Arm has defined my working life, and I am very thankful for being given the opportunity to grow from graduate engineer to CEO," says Segars. "I'm very bullish on Arm’s future success under Rene’s leadership and can't think of any anyone better to lead the company through its next chapter."

No firm date has yet been issued for Arm's flotation.

Main article image courtesy Getty Images.