The big deal that failed – Nvidia’s cancellation of its acquisition of Arm
As you know, Arm is no product It does not have hardware and the business model of this company is actually to charge for the intellectual property of Arm architectures. In other words, Arm designs various components of computer chips and licenses the use of these architectures to chip manufacturers. What was mentioned in the introduction of this news under the title of regulatory obstacles, was actually the concern of the regulatory bodies about the impact of accepting Arm’s business model after its handover. According to Nvidia, the company failed to convince regulatory bodies that the deal will not affect Arm’s business model.
About two weeks ago, Bloomberg reported on the failure of this The transaction was announced and the reason for it was the concern of the regulatory bodies of the United Kingdom, the United States and the European Union about the future fate of Arm owned by Nvidia. Following the cancellation of this deal, we saw a major management change in the Arm group. In this way, Simon Segars, the CEO of the company, resigned from his position and Rene Haas, the head of Arm’s IP (Intellectual Property) group, replaced him. It is interesting to know that Rene Haas was the vice president of Nvidia and the internal management of its computer products business before joining the Arm group.
According to Arm’s new CEO, Seegers’ decision to leave the company was largely a personal choice. According to Renee Haas, Seegers concluded at the current stage that he did not have the time and energy needed to take the company public and did not consider the existing conditions favorable. While thanking Simon Segers for his 30 years of service to the company, Masayoshi Son, SoftBank’s founder and CEO, described Rene Haas as a leader and Arm’s growth will accelerate under his leadership.
Rumors of Nvidia’s acquisition of Arm were first heard in September 2020, and the deal has been under the microscope since its inception. Jensen Huang, the CEO of Nvidia, has repeatedly defended the deal in public and finally admitted that the deal will take longer than planned.
The deal – if it goes through – could be one of the biggest in the industry, as Arm’s architecture and intellectual property for every chip used in smartphones and tablets (as well as some of server chips) is important all over the world. Another aspect of Arm’s importance is that Apple’s future product roadmap for the company’s laptops and PCs depends on Arm architectures. Not to mention, now that the deal isn’t finalized, Nvidia is obligated to pay $1.25 billion in compensation to SoftBank.
As mentioned in the introduction, SoftBank officials are looking to turn this company into a public company with the initial public offering of Arm shares. Arm’s IPO process will start from the beginning of the company’s financial year (April 1) and will be implemented in the next 12 months. Another point is that, after the cancellation of the purchase deal, Arm will retain its current license to use Arm technology.
Initially, Nvidia was silent in response to this news and refused to comment on it. But a day later, he confirmed it by issuing a press release. “Arm has a bright future, and we will continue to support them as a (proud) licensee for decades to come,” Nvidia CEO Jensen Huang said in the statement.