San Francisco, NFAPost: Nvidia’s efforts to acquire Arm is now put a full stop. The two companies and Arm’s owner SoftBank announced the decision to not to go ahead with the process.
The Financial Times first reported that the deal had collapsed earlier today.
The decision of SoftBank and Nvidia to cancel their further discussion is also heralded major leadership change at Arm. The company’s current CEO Simon Segars has decided to quit his position with effect from today.
According to official sources, Arm’s IP group President (and former Nvidia VP and general manager of its computing products business) Rene Haas will take over as the new CEO.
Commenting on the development, Arvian Research stated that there is a possiblity of Arm going for initial public offering.
“The current plan is for the IPO to happen sometime within the next 12 months. Also, the company has made its impact in areas like the cloud and the data center along with automotive sector. It will have to explore huge opportunity for future markets such as IoT and metaverse,” said Arvian Research.
SoftBank Group Corp Chairman and CEO Masayoshi Son who is also representative Director, Corporate Officer of ARM said Rene is the right leader to accelerate Arm’s growth as the company looks to re-enter the public markets.
“I would like to thank Simon for his leadership, contributions and dedication to Arm over the past 30 years,” SAID SoftBank Group Corp Chairman and CEO Masayoshi Son.
Rene Haas noted that Arm’s business today is stronger than ever. “We are very enthusiastic and excited about this next chapter for the company. The company’s been doing great. […] Revenue and profitability levels never seen by Arm before and certainly not seen before we joined SoftBank. But, probably more importantly, the diversification of the business relative to what it looked like pre-SoftBank, we’re a much stronger company now in areas like the cloud and the data center, we’re a much stronger company in markets like automotive and we have a huge opportunity for future markets such as IoT and metaverse,” said Rene Haas.
Nvidia CEO Jensen Huang said Arm has a bright future and Nvidia will continue to support them as a proud licensee for decades to come.
“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,” said Nvidia CEO Jensen Huang.
Nvidia dominates the GPU and AI accelerator market and also owns the IP to the chips that power virtually every smartphone and IoT device rang all kinds of alarm bells. The two companies would’ve likely had to make considerable changes to their deal to get it through the regulatory process — or abandon it.
Nvidia first announced its plans for this mega-merger in September 2020. At the time, Nvidia CEO Jensen Huang argued that this would allow his company to create “a company fabulously positioned for the age of AI.”
Throughout all of this, Nvidia’s and Arm’s leadership publicly remained optimistic that the deal would eventually pass muster with the regulatory authorities. Knowing that there would be some pushback, the two companies had always given themselves a lot of time to close this deal, with an expected closing date of March 2022, 18 months after the announcement.
In recent months, both companies admitted that they would miss this date. They were also up against a bit of a deadline of September 2022, after which SoftBank would keep its $1.25 billion breakup fee, though now that the deal is off, SoftBank will keep it anyway.
