SoftBank Plans Arm IPO Instead
Nvidia’s two-year effort to acquire semiconductor maker Arm will end in failure, says a Bloomberg report. Nvidia first announced plans to acquire Arm from SoftBank Group in a $40 billion deal in September 2020. Japanese bank SoftBank acquired Arm in 2016 for $32 billion.
Nvidia almost immediately encountered resistance from industry and regulators. Hyperscalers and other semiconductor manufacturers like Intel and Qualcomm have sounded the alarm. Nvidia offered concessions to EU regulators in October. Then, in December, the US Federal Trade Commission (FTC) filed a lawsuit to block the acquisition. This appears to have been the final blow for the struggling acquisition.
FTC Competition Bureau Director Holly Vedova said the FTC made its decision to help preserve a competitive and healthy semiconductor economy.
“This proposed deal would distort Arm’s incentives in chip markets and allow the combined company to unfairly undermine Nvidia’s rivals. The FTC lawsuit should send a strong signal that we will act aggressively to protect our markets. of critical infrastructure against illegal vertical mergers that have far-reaching and detrimental effects on future innovations,” Vedova said.
Bloomberg reports that Nvidia has told its partners that it does not expect the deal to go through. He also said SoftBank is stepping up plans for a public offering of Arm stock instead. Bloomberg cites several unnamed sources to corroborate the report. Nvidia and Arm offered Bloomberg diplomatic non-responses in response to questions about the deal.
According to the initial signing agreement, SoftBank keeps $2 billion from Nvidia if the deal ends unsuccessfully.
Nvidia’s data center ambitions
Nvidia’s ambition to acquire Arm hasn’t stifled its efforts to get its hardware as far out as possible. Nvidia has grown from just a maker of high-performance GPUs for gamers and 3D modelers. Today, the company is a formidable fabless semiconductor company with global influence. Nvidia ranks only behind Qualcomm and Broadcom in overall semiconductor revenue for 2020, according to a Trendforce report.
Nvidia’s data center revenue set records. It has found new markets for its cloud GPUs and data center hardware. Nvidia now manufactures specialized high-performance computing (HPC) systems, specialized systems designed for artificial intelligence (AI) and machine learning (ML), and accelerated computing workloads. The Omniverse of the company, its metaverse project attracted Ericsson. Ericsson and Nvidia use it to create digital twin cities. The goal is to configure optimal placement for 5G network builds before the actual build. Nvidia’s Omniverse recently came out of beta.
Nvidia’s DGX AI Platform is the compute technology that powers Meta’s recently announced AI Research SuperCluster (RSC). The RSC is a supercomputer that Facebook uses to create new AI models. Meta wants to use its modeling to help produce safer online experiences and ultimately rich metaverse interactions, it said in a statement.