Arm had been purchased by SoftBank, a Japanese company that has invested billions in Chinese tech startups. SoftBank was therefore dependent on favorable Chinese regulatory treatment for the success of its investments. It faced scrutiny from U.S. regulators, who worried that its exposure to China made it vulnerable to political pressure from Beijing. SoftBank had purchased Arm in 2016 for $40 billion, but it sold a 51 percent stake in the China division—which according to SoftBank accounted for a fifth of Arm’s global sales—for only $775 million.
