Nvidia’s bid to buy Arm from SoftBank has finally ended in failure.

The semiconductor giants issued a joint statement Tuesday saying the deal has been scrapped due to “significant regulatory challenges.”

But was the acquisition doomed from the beginning?

The takeover was announced to much fanfare back in Sept. 2020, with both firms saying it will create the “world’s premier computing company for the age of AI.”

Instantly, however, there were critics. Hermann Hauser, an entrepreneur who was instrumental in the development of the first Arm processor, came out strongly against the deal. British lawmakers including shadow Business Secretary Ed Miliband and tech giants like Qualcomm, Google and Microsoft followed suit.

Opponents had several gripes with the acquisition, ranging from job security to tech sovereignty. Indeed, the global chip shortage has made many nations start to think about onshoring more semiconductor design and production.

But the main issue with the deal was around access to Arm’s innovative chip designs.

Arm licenses its “architecture” to hundreds of companies around the world. Apple uses them in iPhones and iPads, Amazon uses them in Kindles, and car manufacturers use them in vehicles.

If Nvidia stopped other companies using Arm’s chip designs in their semiconductors then analysts said the implications could have been huge.

Before long, competition regulators in the U.S., the U.K., China and Europe were investigating the deal from all angles, leading tech investors and analysts to speculate that the acquisition would never gain approval.

Nvidia and Arm attempted to win the regulators over, saying they would invest heavily in Arm and allow other firms to keep using the company’s chip designs, but ultimately their efforts were in vain.

Geoff Blaber, CEO of analyst firm CCS Insight, said the deal has faced intense scrutiny and pressure from the start.

“It’s no surprise that the deal has ended in failure,” he said in a statement. “Finding a way to appease regulators whilst maintaining the value and justifying the $40 billion price tag has proven overwhelmingly challenging.”

“CCS Insight stated in September 2020 that the deal would face huge opposition, most notably from Arm licensees who at that point had collectively shipped an average of 22 billion chips annually,” Blaber added.

“As predicted, opposition was considerable and shone a light on the strategic importance of Arm’s technology and the vital need for Arm to remain independent.”

SoftBank is now planning to list Arm on the stock market in 2023, although it hasn’t specified whether the IPO will take place in Britain, where Arm was born, or in New York, where tech companies tend to achieve higher valuations.

“An IPO is a far better option for the Arm ecosystem but is unlikely to provide Softbank a comparable return,” Blaber said.