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'Regulatory challenges' kill NVIDIA's Arm acquisition deal

When NVIDIA announced earlier this week that it was pulling the plug on its US$40 billion deal to buy global chipmaker Arm from current owner SoftBank Group, it was an end to what could have been one of the biggest mergers in tech history.

According to a statement from NVIDIA, the acquisition was simply unworkable due to ‘significant regulatory challenges preventing the consummation of the transaction', despite all parties' best efforts.

NVIDIA initially had plans to take advantage of Arm's innovation in computing power needed to drive artificial intelligence, and it also had planned to establish an AI and research education centre in the UK. An Arm/NVIDIA AI supercomputer was also on the cards.

Despite the deal no longer going ahead, SoftBank Group will keep the $1.25 billion NVIDIA prepaid. These funds will be treated as profit in the fourth quarter, and NVIDIA will retain its 20-year Arm license.

According to NVIDIA's founder and CEO Jensen Huang, NVIDIA will continue to support Arm as a licensee, acknowledging Arm's crucial role 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.

NVIDIA share prices were barely impacted by the news. Additionally, SoftBank is looking to list Arm on the stockmarket, with plans to launch a public offering within the fiscal year March 31, 2023. SoftBank purchased Arm in 2016 for £23.4 billion.

SoftBank Group's representative director, corporate officer, chairman and CEO Masayoshi Son says Arm drives innovation within areas such as mobile phones, cloud, automotive, IoT, and the metaverse. Son notes that Arm is now in its second growth phase and it's time to take the company public.

“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.”

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