The $66 billion sale of British chipmaker Arm from SoftBank to Nvidia collapsed on Monday after regulators in the US, UK and EU raised serious concerns about the impact on competition in the industry. semiconductor company, three people with direct knowledge of the transaction said.

The deal, the largest in the chip sector to date, would have given California-based Nvidia control of a company that puts technology at the heart of most of the world's mobile devices. A handful of big tech companies that rely on Arm's chip designs, including Qualcomm and Microsoft, have opposed the purchase.

SoftBank will face a breakup fee of up to $1.25 billion and will seek to exit Arm via an IPO before the end of the year, one of the people said.

The failure is expected to result in a change in ARM's management, with CEO Simon Segars being replaced by Rene Haas, head of the company's intellectual property division, the person added.

The collapse of the deal robs SoftBank of a huge profit it deserved thanks to a boom in Nvidia's share price.

The cash-and-stock transaction was valued at up to $38.5 billion when it was announced in September 2020. But the value soared as Nvidia shares took off, peaking at $87 billion last November.
In the UK, where politicians have seen Arm as a strategic national asset, attention will turn to whether the company will be listed on the country's domestic market. A competitive scrutiny of the deal in the UK was expanded to include national security considerations late last year.

However, people close to SoftBank said the group prefers the idea of ‚Äč‚Äčlisting Arm in New York and will try to resist nationalist pressure. US markets are assigning higher valuations to tech stocks, even after a recent sharp turnaround, and UK tech managers have recently pushed for changes to listing agreements to make London be more attractive.

Nvidia decided to stop tracking Arm at a board meeting on Monday, a person familiar with the discussion said. Nvidia's pursuit of Arm was an opportunistic attempt to put a stop to rival chips like Intel and AMD, and was prompted by an approach by SoftBank after the Japanese company decided to shut down.

Nvidia CEO Jensen Huang hoped to leverage Arm's processor designs to cement his company's growing role in data centers, where Arm GPUs have become important tools for machine learning.

However, some of the big tech companies that rely on Arm's designs for their own chips argued that having prerogatives over Arm's technology would give Nvidia an unfair advantage, hurting competition.

Nvidia offered competition authorities to continue sales to Arm's other customers after the deal was closed. However, the UK Competition and Markets Authority said it did not believe such deals would be effective, and the US Federal Trade Commission launched an in-depth investigation late last year.