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Nvidia’s breaks off plans to buy Arm as EU moves to bolster Europe’s chip-making abilities

Nvidia’s breaks off plans to buy Arm as EU moves to bolster Europe’s chip-making abilities

Nvidia’s plans to buy UK chip-designer Arm have been ended after months of speculation that various governmental agencies were moving to block the sale.

Nvidia and SoftBank Group Corp. (SBG) earlier this week announced the termination Nvidia’s bid to acquire Arm Limited from SBG. The companies acknowledged that there were “Significant regulatory challenges preventing the consummation of the transaction, despite good faith efforts by the parties.”

Softbank has started preparing Arm for a public offering. The day after the deal was scuppered, Arm announced the appointment of Rene Haas as CEO and member of the board of directors, effective immediately. Haas succeeded Simon Segars, who stepped down as CEO after 30 years with the company.

Among the regulatory challenges were the UK government deciding to ask the Competition and Markets Authority to take an in-depth look at the deal.

Arm is a key player at the edge where its chips dominate due to their ability to offer high performance with low power consumption. The company’s outlook in that regard remains quite bright; its efforts to make inroads into data centers are less clear, but certainly would be aided with cash from a successful IPO.

Europe’s ambitions in chips

Shortly after the news about the Arm deal came out, the European Union passed “The European Chips Act”, which aims bring €45 billion in public and private funding to increase chip production capabilities.

“With a global semiconductors market share of only 10%, Europe is heavily dependent on a just a handful of foreign suppliers,” remarked European Commission executive vice president Margrethe Vestager. The goal of the Act is to move from Europe’s solid position in chip research and improve the EU’s position in new chip manufacturing technologies and facilities in the years to come.

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