Nvidia‘s planned acquisition of Arm from SoftBank has collapsed due to “significant regulatory challenges,” the companies said in a joint release Tuesday.
The deal was originally announced in 2020 and had a value at the time of $40 billion in Nvidia stock and cash.
SoftBank said Arm will now prepare for a public offering within the fiscal year ending March 31, 2023.
Arm makes technology that is at the core of every smartphone processor, including Apple’s iPhones and Android devices running on Qualcomm chips. It counts nearly every major semiconductor company as a client.
The deal faced scrutiny since it was announced. Arm, a British company, is a neutral supplier to several competing tech giants. Qualcomm and Microsoft both use Arm’s main technology, its instruction set, and publicly opposed the deal.
In December, the U.S. Federal Trade Commission sued to block the transaction on antitrust grounds. Last year, U.K. competition authorities announced a probe into the sale.
Semiconductor and technology companies feared that if Nvidia owned Arm, it could favor its own business over its clients who may not have an alternative to ARM technology.
“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,” the FTC said in December.
Arm was founded in Cambridge in 1990 as a joint venture between several firms including Apple. It focused on low-power chips that gained new prominence in the past decade as the rise of smartphones meant that processor efficiency became increasingly more important than the superior raw processing power from chips made by companies like Intel.
Arm was independent until 2016, when SoftBank Group bought it for $32 billion.
Nvidia previously said it expected the transaction to close this year.
