A massive $40 billion deal that should have resulted in Nvidia's purchase of Arm is no long happening. In addition, the CEO of Arm, Simon Segars, is reportedly going to lose his job despite the company's owner, Softbank, receiving $1.25 billion from Nvidia.
Nvidia to Pay Softbank $1.25 Billion
An article by the Financial Times mentions three anonymous sources who claim to have "direct knowledge of the transaction" spoke to them about what took place regarding the Nvidia. Per these anonymous sources, Nvidia is no longer pushing through with the deal that will result in the acquisition of Arm.
Although the deal will no longer be taking place, Nvidia will most likely have to spend around $1.25 billion to Softbank, the owner of Arm, due to the failure of the transaction.
The Nvidia-Arm deal was initially announced back in Sept. 2020 and was considered one of the biggest deals in the industry had it pushed through, according to the report by The Verge.
The deal would have given Nvidia "control of the company whose architecture and intellectual property is key to every practically every smartphone and tablet chip ever made, as well as a growing number of server chips, and Apple's entire future product roadmap for its impressive Arm-powered laptop and desktop PCs."
Arm to Replace Current CEO
In addition, it has also been reported that Arm will also have a new CEO and it is set to be Rene Hass.
This means that the current CEO of Arm, Simon Segars, will be replaced as Hass will be taking over, according to the story by The Verge.
No Comment from Nvidia, Arm, and Softbank
The Verge noted in its report that it has requested for comment from Nvidia. Specifically, the publication requested the company to confirm or deny the reported failure of the deal. However, Nvidia has not given any comment regarding the matter.
The Verge also asked Arm and its owner, Softbank, for comment and the report has also noted that both companies did not immediately respond to the request.
It should be noted that the companies involved have yet to publicly confirm if the deal is really off. However, it has also been claimed that "they are waiting until financial markets open in the UK or Japan, where Arm and Softbank are headquartered, respectively."
'No Surprise' in Deal Falling Out?
An earnings report is expected of Softbank some time in the future.
The publication notes that "it wouldn't be much of a surprise if the deal had fallen through" because the process had always been difficult for Nvidia from the beginning. In fact, Jensen Huang, the CEO of Nvidia, had to frequently defend the plan in public.
Huang later on admitted that the deal would take much longer to take place than they had anticipated.
Bloomberg reported about two weeks ago that the deal may possible no longer happen due to challenges stremming from regulators in the UK, EU, and US.
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Written by Urian B.