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SoftBank and Nvidia call off $40 billion deal for Arm

SoftBank will now pursue an IPO for the chipmaker estimated to be worth $80 billion.

James Martin/CNET

SoftBank and Nvidia announced Tuesday they had terminated their deal to sell chipmaker Arm to Nvidia, citing "regulatory challenges" as a factor in the decision. The acquisition was expected to be worth $40 billion, a deal described as the largest ever in the chip industry.

SoftBank said it now plans to pursue an initial public offering for Arm by March 31, 2023, in developments reported by the Financial Times on Monday. The IPO is estimated to be worth as much as $80 billion.

"Arm has a bright future, and we'll continue to support them as a proud licensee for decades to come," Nvidia CEO Jensen Huang said in a statement. "Though we won't be one company, we will partner closely with Arm."

Japanese tech giant SoftBank agreed to sell Arm to Nvidia in September 2020 but struggled to win regulatory approval. The US Federal Trade Commission sued to block Nvidia's takeover, arguing that it would harm competition, and the UK government opened an investigation into the deal.

Arm isn't as well known as chipmakers Qualcomm and Intel, but its work lies behind the processors inside virtually all the world's mobile phones because it licenses chip designs and related technology to companies like Apple, Samsung and Qualcomm. Arm technology also is used in Apple M1 Mac chips and Amazon Graviton chips.

SoftBank purchased the UK-based Arm in 2016 for $32 billion with the intent of bolstering its internet of things division. Nvidia had said it expected the tie-up to boost its artificial intelligence ambitions.

Arm also announced that Simon Segars would step down as chief executive and a member of the board, with President Rene Haas assuming his duties.