Zhi DongXi (public number: zhidxcom)
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Zhidong reported on February 8 that this afternoon, SoftBank, Nvidia and Arm officially issued a statement announcing the termination of Nvidia's previous acquisition of Arm from SoftBank.
▲NVIDIA and SoftBank announced a statement of termination of trading
SoftBank stated that despite the efforts of both sides, significant regulatory challenges hindered the completion of the transaction. Meanwhile, under the agreement between Nvidia and SoftBank, SoftBank will retain the $1.25 billion deposit previously paid by Nvidia and will be included in profit in the fourth quarter, while Nvidia will retain its 20-year Arm license.
Next, SoftBank and Arm will begin preparing for Arm's public offering (IPO) by March 31, 2023.
At the same time, Arm also underwent an executive change today, with Simon Segars, who has worked at Arm for 30 years, becoming a consultant to the company, and Rene Haas, who was previously president of Arm's IP Product Group (IPG), becoming Arm's new CEO.
First, SoftBank received $1.25 billion, and Nvidia retained a 20-year mandate
This afternoon, NVIDIA and SoftBank officially announced the failure of the transaction, SoftBank will retain the previous $1.25 billion deposit and help Arm prepare for the listing. Nvidia will retain the Arm license for 20 years.
The full text of the statement is as follows:
Nvidia and SoftBank Group today announced the termination of a previously announced acquisition of Arm from SoftBank by Nvidia. Despite good-faith efforts by both parties, the parties agreed to terminate the agreement because significant regulatory challenges hindered the completion of the transaction. Arm will now begin preparing for a public offering.
"Arm has a bright future and we will continue to support them as proud licensees for decades to come." Jen-Hsun Huang, founder and CEO of Nvidia, said, "Arm is at the center of important dynamics in computing. While we won't be a company, we'll be working closely with Arm. Son's significant investment has enabled Arm to expand the range of Arm CPUs from client-side computing to supercomputing, cloud computing, artificial intelligence and robotics. I expect Arm to become the most important CPU architecture for the next decade. ”
SoftBank also announced today that it will partner with Arm to begin preparations for a public offering (IPO) of Arm for the fiscal year ending March 31, 2023. SoftBank believes Arm's technology and intellectual property will continue to be a development in mobile computing and artificial intelligence.
SoftBank Chairman and CEO Masayoshi Son said that Arm is not only becoming an innovation center for the mobile computing revolution, but also an innovation center in the fields of cloud computing, automotive, Internet of Things and meta-universe, and has entered its second growth stage.
Son continued: "I would like to thank Jen-Hoon Wong and his talented team at NVIDIA for their efforts to bring these two great companies together and wish them all the best. ”
Nvidia and SoftBank have previously announced a definitive agreement under which Nvidia will acquire Arm from SoftBank on September 13, 2020. Under the terms of the acquisition agreement, SoftBank will retain the $1.25 billion that Nvidia has prepaid, which will be recorded as a profit for the company in the fourth quarter, and NVIDIA will retain the Arm license for 20 years.
Second, Arm announced the change of CEO, effective immediately!
On the same day that SoftBank and Nvidia announced the failed deal, Arm announced that its board of directors had appointed Rene Haas as Arm's new CEO and joined the board, effective immediately.
Rene Haas, who has 35 years of experience in the semiconductor industry, will take over as former CEO Simon Segars, who has been with Arm for 30 years. In the short term, Simon Segars will serve as an Arm consultant to support the leadership transition.
▲Arm前CEO Simon Segars
"As Arm begins to prepare for re-entry into the open market, Rene is the right leader to accelerate Arm's growth," Son said. He also thanked Simon Segars for his leadership and contributions to Arm over the past 30 years.
Rene Haas has held various roles in application management, application engineering, and product engineering, and spent seven years as vice president and general manager of NVIDIA's Computing Products business unit.
In 2013, Rene Haas joined Arm. He has been President of Arm IP Products Group (IPG) since 2017, during which time he has invested in products in high-growth markets such as the ecosystem of software developers, infrastructure and automotive, attracting companies such as Alibaba, Ampere, AWS, Bosch, Denso, Mobileye and Telechips to join the Arm ecosystem.
Rene Haas said that with the uncertainty of the past few months passing, Arm has prepared a new strategy that will once again change the lives of people around the world.
Third, how is the transaction case that has been surviving for 17 months cool?
Looking back at the earth-shattering deal, in September 2020, SoftBank announced that Nvidia would acquire all of its Arm shares for $40 billion (about 273.32 billion yuan), and the transaction was expected to close within 18 months (March this year).
If the deal is completed, it will be the largest merger ever made by the semiconductor industry. Arm has a 90% market share in both the mobile processor and IoT processor markets and is the global semiconductor IP leader. As a result, the acquisition immediately attracted the attention of the industry and many governments.
Despite Nvidia's assurances that its acquisition will not change Arm's openness and neutrality, it will treat all Arm customers equally. But as Arm's customers, tech giants such as Qualcomm, Google, and Microsoft have doubts about this, and companies such as Qualcomm and Microsoft have also raised concerns about the acquisition to regulators.
Qualcomm CEO Cristiano Amon previously said in an interview that Arm's strength lies in its independence. If Arm is acquired, its architecture will not be in Qualcomm's next-generation chip blueprint, and Qualcomm will develop a new backup plan to transition.
In addition to the doubts of customers, the scrutiny of antitrust authorities in various countries is even more deadly. Under national and regional laws, Nvidia's acquisition of Arm requires regulatory consent from the UNITED Kingdom, China, the European Union and the United States.
But as of the time the two sides declared the deal failed, no regulatory authorities had approved the deal. Because Arm is so important in the industry, the UK government even thinks the decision may hurt national security. The Competition and Markets Authority, the UK's antitrust arm, also launched an investigation into the acquisition in April last year.
Uk Digital Secretary Oliver Dowden issued a statement saying: "We want to support the booming UK tech industry and welcome foreign investment, but we should give due consideration to the national security implications of such deals." ”
▲The UK government issued a public interest intervention announcement (PIIN) in response to the Arm acquisition
In addition to the UK, EU regulators have also launched an in-depth investigation into the transaction. Margrethe Vestager, the EU's antitrust commissioner, said that while Arm and Nvidia do not have direct competition, it may be more difficult for Nvidia's competitors to obtain Arm's technology, which will hurt most semiconductor segments and even spread to data centers, the automotive industry, the Internet of Things and other fields.
The U.S. Federal Trade Commission (FTC) has been more straightforward in its lawsuit against the acquisition. On December 2, 2021, the FTC announced a lawsuit to block NVIDIA's acquisition of Arm.
The FTC argued that the combined Nvidia and Arm companies had the ability to stifle the next generation of technological innovation channels and would unfairly weaken Nvidia's competitors, so the committee unanimously passed the lawsuit against Nvidia's acquisition of Arm.
▲ The FTC disclosed the process of suing Nvidia to acquire Arm
Fourth, the transaction is over, Nvidia will still lay out the Arm ecology
In response to the investigation and prosecution of the industry and various antitrust agencies, Nvidia and Arm have been explaining on various occasions, claiming that they will retain Arm's own independence.
In response to the British government's investigation, Nvidia announced that it does not intend to change Arm's name and brand image after the transaction is completed, and Arm's chip intellectual property (IP) will continue to be registered in the UNITED Kingdom.
In addition, Nvidia will also increase investment in Cambridge, UK, and build Arm CPU-based supercomputers to attract researchers in the UK and around the world.
▲ Nvidia's Cambridge-1 supercomputer in Cambridge
In response to the FTC's lawsuit, Nvidia, Arm and SoftBank jointly issued a 49-page defense, stressing that Arm is currently facing increasing research and development costs, but because Arm's share in major markets such as mobile processors is basically saturated, its IP licensing and royalty revenue is difficult to increase rapidly, facing strong competitive pressure.
For NVIDIA, it has no incentive to hinder technological innovation and treat Arm customers unfairly. Instead, Nvidia believes the merger will accelerate the development of new technologies such as artificial intelligence.
In addition to constantly emphasizing the independence and openness of Arm, through the acquisition of Dongfeng, Nvidia began to fully layout the Arm ecosystem.
At the GTC conference, a month after the 2020 deal was announced, Jen-Hsun Huang announced investments in three areas, including migrating GPUs and DPUs to the Arm ecosystem, accelerating high-performance computing and cloud edge platforms, and providing Arm with advanced SDKs such as NVIDIA AI, HPC, and RTX engines.
▲The latest cooperation progress between Nvidia and Arm at the GTC conference in October 2020
At the GTC conference in April 2021, NVIDIA launched three Arm IP-based processors in a row, namely the TB-level data center CPU NVIDIA Grace, the new generation of DPU BlueField-3 and the 1000TOPS self-driving car SoC NVIDIA DRIVE Atlan.
Since September 2020, NVIDIA's stock price has risen from $130 to $247, an increase of more than 90%, and the total market value has reached $618.2 billion (about 3.94 trillion yuan).
Now, even if the acquisition fails, Nvidia retains arm's license for 20 years. Huang said in a statement that Nvidia will support Arm as a licensee for decades to come. "While we will not be a company, we will work closely with Arm."
Conclusion: The acquisition failure may prevent Nvidia from laying out the Arm ecosystem
Since Nvidia announced the acquisition of Arm, Nvidia and Arm have shown great enthusiasm for the acquisition, and Huang Jenxun and Simon Segars have repeatedly said in public that Arm will remain neutral after being acquired, which has great benefits for Arm's development.
However, since September 2020, due to factors such as chip shortages and trade tensions, regulators in various countries have shown a more cautious attitude towards huge semiconductor mergers and acquisitions, and the US FTC has directly launched a lawsuit to block the deal. For Nvidia, despite the failure of trade, it has launched a number of Products based on Arm IP, or will continue to work with Arm to lay out data centers, artificial intelligence and other fields.