Nvidia Drops Plans To Acquire ARM Due To Regulatory Issues

Last Updated on February 8, 2022 by Anu Joy

Nvidia was planning on purchasing the chip designer company Arm from its owner, SoftBank, back in 2020. It is now reported that Nvidia has eventually decided to drop the bid, confirming previous rumours that suggested the company might back out of the deal due to regulatory concerns.

Nvidia-Arm Deal Collapses

Following regulatory concerns from agencies in the US and Europe that multiple firms rely on the technologies developed by Arm, Nvidia will no longer be acquiring the company. The American GPU manufacturer had offered $66 billion for the acquisition. The deal, if done, would have represented the largest sale in the semiconductor industry.

It is to be noted that Arm is behind the ARM (Advanced RISC Machines) architecture that powers many mobile and desktop processors. For instance, Qualcomm uses ARM architecture and Apple relies on Arm’s instruction set to manufacture custom processors used in iPhones, iPads, and Macs.

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Nvidia acquiring Arm could have fed a sense of insecurity to tech giants such as Apple and Qualcomm, with each depending on their competitor, which is Arm in this case. Just to add more clarity, Nvidia also manufactures its own chips.

Following the termination of the deal, Arm owner, SoftBank, will receive about $1.25 billion as a breakup fee. However, the Japan-based company still expects to sell Arm, which seems a bit challenging owing to its importance to the whole market.

The collapse of the acquisition comes as good news for Arm competitors such as Apple, Qualcomm, and Intel. However, it came as a blow to Nvidia, as the company’s shares dropped after the announcement was made.