The $40 billion Nvidia Arm deal has collapsed under pressure from U.S., U.K, and EU regulators. The Arm is owned by SoftBank Group, which agreed to sell it to chip-maker giant Nvidia. Nvidia and Arm announced the merger in September last year, but it won’t be going through now.
The Federal Trade Commission (FTC) sued to block Nvidia’s $40 billion acquisition of Arm. The regulator’s move came out of concern that the acquisition would be bad for Arm’s neutrality.
What happened to Nvidia & ARM deal?
Both companies announced that Arm would maintain a neutral supply to all companies. However, the merger would’ve meant Nvidia was getting complete control of the architecture designer’s resources.
Here’s what the FTC said on the matter when it sued the deal:
“The proposed vertical deal would give one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips,”FTC’s announcement from the lawsuit
Nvidia is a major graphics chip manufacturer and makes some top-of-the-line chips in the business. On the other hand, Arm’s chip architecture is used by almost all major chip-makers, including Apple and AMD.
The acquisition posed a neutrality problem for the FTC and other regulators. The FTC sued over the merger, and the deal is off.
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Reports also state that Nvidia will still have to cough up to $1.25 billion to Arm owner SoftBank because of the deal’s failure. Arms CEO Simon Segars will also be losing his job to Rene Hass.
While FTC’s report quotes insiders on the matter, there have been no official remarks on developments from Nvidia and Arm or the latter’s parent company SoftBank.