Owing to intense competition and regulatory concerns, the much-anticipated merger between Nvidia and Softbank’s Arm was finally called off. The crucial decision was taken after Nvidia’s board members meeting was held last Monday. Had the deal been signed, this particular merger could have provided Nvidia a considerable upper hand among its competitors in the chip manufacturing business.
As per the Financial Times, Nvidia and SoftBank mutually agreed to cancel the deal because of the regulatory restrictions that arose in the process of completing the final signing. Also, as a result of the deal’s failure, the Arm’s Executive management has also been revamped with Rene Haas, the former intellectual property group’s president, taking over as the next CEO of the firm.
This business move was earlier opposed by several British politicians, as they felt that it would cause a threat to national security if the company gets listed outside the UK stock market. Yet, Nvidia continued its pursuit by stating that this deal would hugely benefit Arm for extending its presence in unexplored markets in the near future.
This recent development has given a huge sigh of relief for big tech giants such as Microsoft and Qualcomm, as they were heavily relying on the Arm’s chip designs for manufacturing a majority of their technological products. No wonder they strongly opposed it right from the beginning with such force! If this deal had been completed, Nvidia would have gained first rights to Arms technology, thereby leaving its competitors right at the back foot in the race of producing flagship gadgets.
The signing of this merger deal was declared in September 2020. Here it has to be noted that there has been a heavy scarcity of semiconductor chips recently across the world, which had even affected the new consoles production rate of market leaders such as Nintendo and PlayStation.