The previously announced agreement between NVIDIA and SoftBank Group (SBG), in which NVIDIA would buy Arm from SBG, has been canceled. Despite their best efforts, the parties agreed to terminate the acquisition agreement due to major regulatory difficulties that prevented the transaction from being completed. Arm will now begin the process of preparing for a public offering (IPO).
On September 13, 2020, NVIDIA and SoftBank announced that they had reached a formal deal under which NVIDIA will buy Arm from SoftBank. In this $40 billion deal being announced, the plans were as follows. NVIDIA’s premier AI computing platform would be combined with Arm’s huge ecosystem in this partnership. SoftBank’s ownership interest in NVIDIA, which is estimated to be around 10%, would keep it dedicated to Arm’s long-term success.
Arm would continue to use its open-licensing methodology as part of NVIDIA. It would also preserve the worldwide customer neutrality that has been critical to its success, with its licensees shipping 180 billion chips to date. Both businesses’ products, including NVIDIA’s various advancements, would benefit arm partners. So now this deal appears to be off.
“Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come,” said Jensen Huang, Founder and Chief Executive Officer (CEO) of NVIDIA. “Arm is at the center of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm. The significant investments that Masa has made have positioned Arm to expand the reach of the Arm CPU beyond client computing to supercomputing, cloud, AI and robotics. I expect Arm to be the most important CPU architecture of the next decade.”
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Arm IPO
SBG stated that it will begin preparations for an Arm public offering in the fiscal year ending March 31, 2023, in collaboration with Arm. SBG thinks Arm’s technology and intellectual property will remain at the forefront of mobile computing and artificial intelligence (AI) development.
“Arm is becoming a center of innovation not only in the mobile phone revolution, but also in cloud computing, automotive, the Internet of Things and the metaverse, and has entered its second growth phase,” said Masayoshi Son, Representative Director, Corporate Officer, Chairman & Chief Executive Officer of SoftBank Group. “We will take this opportunity and start preparing to take Arm public, and to make even further progress.”
Softbank Group will keep the $1.25 billion prepaid by NVIDIA, which will be recognized as profit in the fourth quarter, and NVIDIA will keep its 20-year Arm license, according to the terms of the agreement.
