The deal caught the attention of global regulators with anti-competition investigations launched in several jurisdictions including the UK, EU, and US.

In November 2021, UK Digital Secretary Nadine Dorries decided to block the merger pending the results of a 24-week ‘Phase 2’ investigation.

With the merger looking almost impossible to be approved by regulators, Nvidia has decided to throw in the towel.

Jensen Huang, Founder and CEO of Nvidia, said:

“Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come.

Arm is at the centre 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.”

Arm has struggled from relatively flat revenues and rising costs despite the huge success of the company’s licensees such as Apple, Qualcomm, and Amazon.

SoftBank, Arm’s current owner, considered and subsequently rejected the idea of pursuing an IPO (Initial Public Offering) of the company in 2019 and again in early 2020.

“We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast, and innovate,” explained Simon Segars, CEO of Arm, last month.

Following the collapse of the Nvidia acquisition, Softbank will now have to reconsider an IPO for Arm.

Dr Lil Read, Analyst in the Thematic Research Team at GlobalData, commented:

“Softbank now needs to think of Arm’s future. An initial public offering (IPO) looks likely – the UK government would surely like to see the home-grown chip designer float in London, and potential IPO reforms could create the perfect environment for this. 

Otherwise, Arm may be ripe for a takeover by a private equity consortium backed by chip-friendly giants such as Apple, Qualcomm, and TSMC – Arm’s largest customers.”

Some of Nvidia’s rivals are said to have offered to invest in Arm if it helps the company to remain independent. A takeover from a private equity consortium looks to be Arm’s best option. If the company has to launch an IPO, it could struggle and will face some difficult choices.

Arm’s largest market, mobile, is saturated. The company will struggle to crack the datacentre and PC markets in the face of strong incumbents like Intel and AMD that have established ecosystem of developers, software, systems, and peripherals, and profits that enable them to make large R&D investments.

In an earlier response to the UK’s Competition and Markets Authority, aiming to quell the regulator’s fears about its acquisition of Arm, Nvidia wrote:

“Nvidia is particularly concerned that these pressures would drive Arm to deprioritize datacenter and PC and to instead focus on its core mobile and growing IoT businesses.

The result would be a concentrated CPU market largely controlled by Intel/AMD (x86).”

Capital markets would likely expect Arm to cut costs to maximise the company’s value. However, SoftBank sounds bullish on its prospects.

“Arm is becoming a centre 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, and CEO of SoftBank Group.

Arm has announced a management shake-up in the wake of Nvidia’s exit from the deal.

Rene Haas, the former head of Arm’s intellectual property unit, will take over as the company’s chief executive and lead it during these challenging times. Haas previously worked at Nvidia for seven years.

With the Nvidia acquisition off the table, we can only hope that Haas finds a way to ensure Arm can continue to deliver the semiconductor innovation that it has for three decades.

(Photo by Dustin Tramel on Unsplash)

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NVIDIA is investing heavily in the UK’s accelerating AI sector. The company announced its acquisition of legendary semiconductor giant Arm for $40 billion back in September along with the promise to open a new AI centre in Cambridge.

“We will create an open centre of excellence in the area once home to giants like Isaac Newton and Alan Turing, for whom key NVIDIA technologies are named,” Huang said at the time. “We want to propel Arm – and the UK – to global AI leadership.”

NVIDIA promises to advance Arm’s platform in three major ways:

• NVIDIA will complement Arm partners with GPU, networking, storage and security technologies to create complete accelerated platforms.
• NVIDIA will work with Arm partners to create platforms for HPC, cloud, edge and PC — this requires chips, systems, and system software.
• NVIDIA will port the NVIDIA AI and NVIDIA RTX engines to Arm.

“Today, these capabilities are available only on x86,” Huang said, “With this initiative, Arm platforms will also be leading-edge at accelerated and AI computing.”

Huang also provided more details about NVIDIA’s effort to build the UK’s fastest supercomputer, the Cambridge-1.

Cambridge-1 will boast 400 petaflops of AI performance and will be used by NVIDIA for its vast AI and healthcare collaborations in the UK across academia, industry, and startups.

“Tackling the world’s most pressing challenges in healthcare requires massively powerful computing resources to harness the capabilities of AI,” said Huang. “The Cambridge-1 supercomputer will serve as a hub of innovation for the UK and further the groundbreaking work being done by the nation’s researchers in critical healthcare and drug discovery.”

The company’s first partners are AstraZeneca, GSK, King’s College London, the Guy’s and St Thomas’ NHS Foundation Trust, and startup Oxford Nanopore. A partnership with GSK will also see the world’s first AI drug discovery lab built in London.

“Because of the massive size of the datasets we use for drug discovery, we need to push the boundaries of hardware and develop new machine learning software,” commented Dr Kim Branson, senior vice president and global head of AI and ML at GSK.

“We’re building new algorithms and approaches in addition to bringing together the best minds at the intersection of medicine, genetics and artificial intelligence in the UK’s rich ecosystem. This new partnership with NVIDIA will also contribute additional computational power and state-of-the-art AI technology.”

While there were some natural concerns that Arm’s acquisition would see operations move from the UK to the US, NVIDIA clearly wants to build up its operations in what’s quickly becoming Europe’s AI epicentre.

(Photo by A Perry on Unsplash)

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British chip designer ARM’s technology is at the heart of most mobile devices. Meanwhile, Nvidia’s GPUs are increasingly being used for AI computation in servers, desktops, and even things like self-driving vehicles.

However, Nvidia was most interested in ARM’s presence in edge devices—which it estimates to be in the region of 180 billion.

Jensen Huang, CEO of Nvidia, said:

“ARM is an incredible company and it employs some of the greatest engineering minds in the world. But we believe we can make ARM even more incredible and take it to even higher levels.

We want to propel it — and the UK — to global AI leadership.”

There were concerns Nvidia’s acquisition would lead to job losses, but the company has promised to keep the business in the UK. The company says it’s planning to hire more staff and retain ARM’s iconic brand.

Nvidia is going further in its commitment to the UK by opening a new AI centre in Cambridge, which is home to an increasing number of exciting startups in the field such as FiveAI, Prowler.io, Fetch.ai, and Darktrace.

“We will create an open centre of excellence in the area once home to giants like Isaac Newton and Alan Turing, for whom key NVIDIA technologies are named.

Here, leading scientists, engineers and researchers from the UK and around the world will come to develop their ideas, collaborate and conduct their ground-breaking work in areas like healthcare, life sciences, self-driving cars, and other fields.”

The new centre will have five key features when it opens:

• ARM/Nvidia-based supercomputer – set to be one of the most powerful AI supercomputers in the world.
• Research Fellowships and Partnerships – Nvidia will use the centre to establish new UK-based research partnerships, expanding on successful relationships already established with King’s College and Oxford.
• AI Training – Nvidia will make its AI curriculum available across the UK to help create job opportunities and prepare “the next generation of UK developers for AI leadership”
• Startup Accelerator – With so many of the world’s most exciting AI companies launching in the UK, the Nvidia Inception accelerator will help startups succeed by providing access to the aforementioned supercomputer, connections to researchers from NVIDIA and partners, technical training, and marketing promotion.
• Industry Collaboration – AI is still in its infancy but will impact every industry to some extent. Nvidia says its new research facility will be an open hub for industry collaboration, building on the company’s existing relationships with the likes of GSK, Oxford Nanopore, and other leaders in their fields.

The UK is Europe’s leader in AI and the British government is investing heavily in ensuring it maintains its pole position. Beyond funding, the UK is also aiming to ensure it’s among the best places to run an AI company.

Current EU rules, especially around data, are often seen as limiting the development of European AI companies when compared to elsewhere in the world. While the UK will have to avoid being accused of doing a so-called “bonfire of regulations” post-Brexit, data collection regulations is likely an area which will be relaxed.

In the UK’s historic trade deal signed with Japan last week, several enhancements were made over the blanket EU-Japan deal signed earlier this year. Among the perceived improvements is the “free flow of data” by not enforcing localisation requirements, and that algorithms can remain private.

UK trade secretary Liz Truss said: “The agreement we have negotiated – in record time and in challenging circumstances – goes far beyond the existing EU deal, as it secures new wins for British businesses in our great manufacturing, food and drink, and tech industries.”

Japan and the UK, as two global tech giants, are expected to deepen their collaboration in the coming years—building on the trade deal signed last week.

Shigeki Ishizuka, Chairman of the Japan Electronics and Information Technology Industries Association, said: “We are confident that this mutual relationship will be further strengthened as an ambitious agreement that will contribute to the promotion of cooperation in research and development, the promotion of innovation, and the further expansion of inter-company collaboration.”

Nvidia’s investment shows that it has confidence in the UK’s strong AI foundations continuing to gain momentum in the coming years.

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