SoftBank’s record-breaking sale of a prized chip designer to Nvidia has officially been called off.

At an initial value of $40 billion, the US chipmaker’s acquisition of British design firm ARM would have been the largest semiconductor deal on record. But regulators around the world have long raised concerns about the deal, eventually leading to its collapse on Tuesday.

In a statement, SoftBank cited “significant regulatory challenges” that prevented it from completing the deal. It said that it would instead prepare ARM for a public offering within the fiscal year ending March 2023.

Under the terms of the agreement, SoftBank had already received a deposit of $1.25 billion during the signing. That payment was non-refundable, and “will be recognized as profit” in the Japanese conglomerate’s earnings for the quarter ending this March, it said.

ARM designs chips used by Apple (AAPL) and other major smartphone makers. The firm is based in Cambridge and is known as one of Britain’s most successful tech companies. The transaction was first announced in 2020, four years after SoftBank bought ARM for $32 billion, marking the largest foreign takeover by a Japanese firm at the time. It was originally expected to close within 18 months, which would have been around this time. But it ran out of steam as it became a subject of global regulatory scrutiny, including from China and the United Kingdom. Just days after the announcement, an opinion piece in Chinese state-run tabloid Global Times had dubbed the move “disturbing.” “If ARM falls into US hands, Chinese technology companies would certainly be placed at a big disadvantage in the market,” read the op-ed.

In December, the US Federal Trade Commission sued to block the deal, saying it would stifle competition and give the combined company too much control over chip technology and designs. The European Commission also launched an investigation into the deal late last year. The deal would have had to pass regulatory approvals from the United Kingdom, the European Union, the United States and China.

Had it gone through, it would have been the semiconductor industry’s biggest-ever deal, topping Avago’s acquisition of Broadcom in 2015, according to Dealogic.

Speaking at an earnings presentation on Tuesday, SoftBank (SFTBF) CEO Masayoshi Son remained optimistic about future plans for ARM.

While he acknowledged that his company was now pivoting toward a “plan B,” he said that SoftBank had originally hoped to take ARM public after acquiring it years ago.

“[So] this is [the] original plan again,” he said.

Still, the billionaire hit out at those who had opposed the deal, arguing that critics had appeared “eager to block” a deal between “two totally different businesses.”

In the history of antitrust complaints, “this could be the first case” involving claims about two such “different companies,” he said, likening Nvidia and ARM to the makers of car engines and tires.

“Why do they have to block this transaction?” he asked.

ARM also announced a new leader on Tuesday, saying that long time CEO Simon Segars would be replaced by executive Rene Haas.

In a statement, Son thanked Segars for his 30-year tenure at the company and said that “Rene is the right leader to accelerate ARM’s growth as the company starts making preparations to reenter the public markets.”