NVIDIA Calls Off Arm Deal As Softbank Preps For Biggest IPO In Semiconductor History
NVIDIA is officially out of the running to acquire Arm from Softbank for $40 billion, which would have been the largest chip deal ever. Faced with mounting regulatory challenges, NVIDIA and Softbank agreed to terminate the pending transaction, and the latter will now pivot to prepping for a public offering that could likewise be the "biggest IPO ever in semiconductor history."
This had to have been a tough albeit probably inevitable decision for NVIDIA to make, which just two weeks ago said it remained hopeful the transaction would be approved as rumors to the contrary swirled. Convincing various regulatory bodies (US, UK, Europe, and China) that such a deal should be approved was always going to be an uphill battle, and in the end it just proved too steep to climb.
"Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come," said Jensen Huang, founder and chief executive officer of NVIDIA."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 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."
As part of the deal, NVIDIA prepaid $1.25 billion to Softbank, which it gets to keep as a breakup fee. Meanwhile, NVIDIA retains a 20-year Arm license, so both sides at least get something out of the deal that never got consummated.
Since almost the outset of the now-defunct deal being announced, several major technology firms voiced opposition. For example, Qualcomm raised concerns that if NVIDIA would become of the gatekeeper of Arm's IP, it could prevent other companies from using its technologies. That was pretty much the mantra of those opposed to the acquisition, given that Arm's IP is so broadly employed—Arm technology can be found in everything from wireless routers and smart TVs, to even server farms.
It's all water under the silicon bridge at this point. In the wake of the announcement, Softbank founder Masayoshi Son offered some additional thoughts during an earning calls, saying Arm is on the cusp of a "golden age."
"This is a return to our original plan. We will aim for the biggest IPO ever in semiconductor history," Son said.
To lead the effort, Arm announced a new CEO. Rene Haas, a 35-year semiconductor industry leader (including seven years at NVIDIA as vice president and general manager of its computing products business), replaces Simon Segars in the role and will join Arm's board of directors.