Official: Nvidia pulls out of $40 billion British Chip Designer Arm purchase

Image: Nvidia

Update #2 [Tue 25th Jan, 2022 14:15 GMT]: Nvidia has formally abandoned its proposed purchase of British chip developer Arm after regulatory hurdles proved insurmountable (thanks, The keeper).

Arm owner SoftBank, who bought Arm back in 2016 for $32 billion, said today that Arm will now be preparing for a stock market float before the end of the fiscal year on March 31, 2023.

In a separate statement, Arm said it has appointed René Haas as its CEO with immediate effect. Haas joined Arm in 2013 and had worked at Nvidia for seven years prior to that.

SoftBank CEO Masayoshi Son said:

René is a suitable leader to accelerate Arm’s growth as the company looks to return to the public markets.

Update #1 [Tue 25th Jan, 2022 14:15 GMT]: Bloomberg reports that Nvidia is set to backtrack on its proposed $40 billion purchase of British chip designer Arm from SoftBank. The move was revealed in September 2020.

Nvidia, which makes chips for the Switch, Switch Lite and Switch OLED, has apparently told partners it doesn’t expect the deal to go through. Meanwhile, SoftBank is gearing up for Arm’s initial public offering (IPO).

Speaking to Bloomberg, an Nvidia spokesperson said the firm still believes the acquisition “provides an opportunity to accelerate Arm and increase competition and innovation.”

Arm and SoftBank have yet to comment on the report, but at the time the deal was announced, there were doubts it would pass North American, UK and EU regulators, and concerns were raised that such a merger would be bad for competition.

original story [Mon 14th Sep, 2020 09:30 BST]: Arm — a British semiconductor design firm that develops mobile technology used in millions of devices around the world through companies like Apple, Microsoft and Qualcomm — is being acquired by Nvidia from Japan’s SoftBank for a whopping $40 billion.

At least initially, it seems like Nvidia is looking to leave things as they are and Arm will continue to be based in the UK – Nvidia has even pledged funds to set up an AI research center at Arm HQ, hinting that the deal is more about the future of AI. than about using the Arm technology network. Nvidia has also said it intends to build massive Arm-based data centers for cloud computing and other uses.

However, in the long run, it makes sense to see this acquisition as Nvidia’s way of breaking into the processor sector, an area in which it has traditionally struggled. The company’s core business is GPUs, and in addition to the Tegra system-on-a-chip line used in the Nintendo Switch, it’s more focused on artificial intelligence and automotive technology.

Early Tegra chips were for smartphones and MP3 players like the ill-fated Microsoft Zune, but Nvidia has struggled to move into the smartphone sector, which is dominated by Arm-based Qualcomm Snapdragon chipsets, and has instead focused on bringing its silicon into tablets and its own devices. . devices such as the Nvidia Shield line, whose creation may have helped gain Nintendo’s attention when it came to the technology it wanted to bring to the Switch.

Arm’s business model is based on licensing its intellectual property to other companies for manufacturing rather than manufacturing the chips themselves. This means that once the deal is closed, Nvidia (via Arm) will receive royalties for every Arm chipset produced in the world.

For Arm, this is another testament to how successful the business, founded back in 1990 with Acorn Computers’ Archimedes home computer, has become over the years. Arm chips are used in almost all smartphones these days, and were previously found in the Game Boy Advance, Nintendo DS, 3DS, and Switch (Nvidia Tegra’s “System on a Chip” uses Arm’s silicon as its processor). Apple recently decided to use Arm chips in its upcoming MacBooks, and Microsoft is also building versions of Windows and Surface OS that will run on Arm. This somewhat explains why Nvidia had to pay $10 billion more than the $30 billion SoftBank bought the company for in 2016, at a time when Nvidia was worth about the same. Today Nvidia is worth $300 billion.

So how does this benefit Nintendo? Nvidia and Arm now, so to speak, under one roof, will only strengthen the position of the first in the market; it will now have a big impact on the world’s most popular mobile processor technology (although it has been stated that Nvidia intends to keep Arm “neutral” so it won’t get any unique advantage, at least to begin with) and it could serve as a good an omen when it comes to Nintendo’s position in the gaming hardware market over the next decade – if it chooses to stick with Nvidia’s Tegra chips, of course.

Arm’s success will now directly benefit Nvidia, which will only strengthen the company’s position in the mobile chipset market. Nvidia is already a global leader when it comes to GPU technology (an area where Arm is also involved with its Mali chipsets), so working more closely with Arm’s world-leading mobile processors could lead to some particularly interesting technology developments. the field of portable computers are developments that could potentially define the future of the Switch brand.

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