Nvidia ARM takeover failed: loss in the billions of euros

That was probably nothing. The planned takeover of chip manufacturer ARM by Nvidia has failed. The authorities’ resistance to the acquisition was apparently too great. Instead, ARM plans to go public in 2023.

ARM takeover by Nvidia burst

Chips from the British manufacturer ARM are used in almost all smartphones. For years, graphics card manufacturer Nvidia has been trying to take over the manufacturer. But the planned takeover has now failed, as both companies announce. Antitrust authorities and other industry giants had been opposing the deal for years, apparently with success.

It was feared that Nvidia could use chips based on the ARM structure to improve its own market position in a possible takeover. However, the graphics card manufacturer always rejected this. However, the headwind from the technology industry was huge. ARM currently belongs to the owner SoftBank and is currently worth around 40 billion US dollars.

Competitors see a problem primarily in ARM’s independent licensing model. Until now, ARM acted completely independently and could develop its own architecture independently and neutrally in order to make it available to interested companies on the basis of their own developments.

Since Nvidia, on the other hand, develops ARM processors itself, a corresponding takeover would be in direct competition with license buyers, which would lead to an unfair market situation. Officially, Nvidia and SoftBank cite “regulatory challenges”as the reason for the failed takeover plans, after the U.S. government in the form of the Federal Trade Commission (FTC) filed a complaint against the takeover in December last year.

Nvidia pays, ARM goes public

Due to a previously established clause in the contract, Nvidia will still have to dig deep into its pockets despite the failed plans. As confirmed by both companies, Nvidia will have to pay a whopping $1.25 billion to SoftBank, equivalent to just under half of the graphics card maker’s quarterly profit.

At ARM, on the other hand, CEO Simon Segars is stepping down due to the failed takeover. Henceforth, Rene Haas is at the helm of the company, as they officially announced. A piquant detail: previously, Haas worked for years as head of the Computing Products Business at Nvidia.

And he has ambitious plans. SoftBank wants to list ARM on the U.S. stock exchange as early as next year. The necessary initial public offering (IPO) is to be completed by the end of March 2023. However, Nvidia plans to continue to purchase licenses based on the ARM architecture. The company also wants to offer processors with ARM CPU cores and specially developed GPU cores in the future, according to reports.