Nvidia Abandons Arm Acquisition in Face of 'Significant Regulatory Challenges'

As expected, Nvidia has officially abandoned efforts to acquire chip maker Arm after talks reportedly "collapsed" between the two parties on Monday, according to 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."

Reports late last month suggested California-based Nvidia was edging away from its planned acquisition of the British chip company, owned by Japanese multinational Softbank, because of its failure to win approval from regulators.

In December 2021, the United States Federal Trade Commission filed a lawsuit to prevent Nvidia from acquiring Arm as the purchase would give Nvidia control over computing technology and designs that rival firms rely on to develop competing chips.

The FTC said that allowing the acquisition to move forward would stifle "innovative next-generation technologies" and would "unfairly undermine" Nvidia's competitors.

Nvidia is a customer of Arm and Arm has many licensing deals with Nvidia competitors, which is why it was clear from the beginning that the purchase would be subject to regulatory scrutiny. Nvidia first announced plans to purchase Arm in September 2020.

Chipmaker Qualcomm was one of the Nvidia competitors that objected to the purchase, and in February 2021, it told several regulatory bodies in the US, UK, and EU that the acquisition would allow Nvidia to become the gatekeeper for Arm's technology, preventing other chipmakers from using it.

Arm licenses its chip designs to over 500 companies, including Apple, and its architecture is used in 95 percent of the world's smartphones. Arm's hardware underpins all of Apple's custom silicon processors such as the A14 in the iPhone 12 and the M1 in the MacBook Pro, since Apple licenses the Arm instruction set.

If the proposed $66 billion dollar acquisition had gone through, it would have been the biggest sale in the history of the semiconductor industry.