Nvidia’s dream of owning Arm is reportedly over | ZDNet

Much like the rumours in 2020 leading up to the official confirmation that Nvidia would look to purchase Arm for $40 billion, the rumour mill to start 2022 has been in overdrive as the deal looks like it’s now set to crash against the shore.

The Financial Times reported during the London night that Nvidia was walking away from the deal, SoftBank would get $1.25 billion as a break fee for its trouble, and Arm would get a new CEO as its Japanese conglomerate owner is set on listing the chip designer this year. This reporting was echoed in subsequent stories from The New York Times and Reuters.

Under the terms of the September 2020 deal, Nvidia had agreed to pay SoftBank $12 billion in cash, $21.5 billion in Nvidia stock, with $5 billion placed under an earn-out clause. The IoT services part of Arm was part of the purchase.

But along with industry concern over the prospect of Nvidia gaining control of Arm, regulators around the world expressed similar feelings.

In October, the European Commission opened an in-depth investigation saying it was concerned that Nvidia would restrict access to Arm IP, which would lead to higher prices and lessened competition, after concluding an initial investigation. It added that Nvidia had filed commitments that met some of its preliminary concerns, but these were not enough to “clearly dismiss its serious doubts”.

Specifically, the commission said it was concerned about the impact of the transaction on data centre CPUs, smart interconnects, chips in car infotainment and driver-assistance systems, high-performance IoT devices, gaming consoles, and PCs.

This was followed up in November when Nvidia CFO Colette Kress said the US Federal Trade Commission had its own concerns, with some Arm licensees objecting to the deal. In the same month, the UK launched its own probe into the deal.

A month later, the US Federal Trade Commission (FTC) filed to a lawsuit to block the deal.

“The proposed merger would give Nvidia the ability and incentive to use its control of this technology to undermine its competitors, reducing competition and ultimately resulting in reduced product quality, reduced innovation, higher prices, and less choice, harming the millions of Americans who benefit from Arm-based products,” the FTC said at the time.

It added the acquisition would harm competition by giving Nvidia access to the competitively sensitive information of Arm’s licensees, some of whom are GPU giant’s rivals, and that it could decrease the incentive for Arm to pursue innovations that are perceived to conflict with Nvidia’s business interests.

The trial had been scheduled for August.

When the deal was first announced, Nvidia founder and CEO Jensen Huang told journalists the companies were “completely complementary”.

“Our intention is to combine the engineering and the tech — the R&D capacity of both companies so that we can accelerate the development of technology for Arm’s vast ecosystem, and one of the areas … that we very interested in, is to accelerate the development of server CPUs,” he said.

Arm’s president of IP Products Group Rene Haas, who is reported to be the new CEO, also previously assured there would be a firewall between the two companies and added that they would not give any early access to Nvidia. But Haas later admitted that Arm would have to share certain information with Nvidia, such as if large customers move to RISC-V, an open-source competitor to Arm.

Related Coverage