EU to Review Nvidia's $700M Acquisition of Run:ai Amid Competition Concerns

EU investigates Nvidia acquisition of Run:ai over competition risk

The Italian competition watchdog requested the investigation for fear the acquisition will affect trade in the single market. The European Commission is set to assess Nvidia's proposed acquisition of the start-up Run:ai because of concerns that it may pose competition risks. The chip giant announced the plan to acquire the Israeli start-up Run:ai in April. Run:ai provides an open platform for enterprise customers to manage and optimise their artificial intelligence (AI) compute infrastructure, whether on premises, in the cloud or in hybrid environments. At the time, Nividia said that the joining of the companies' technology would "support a broad ecosystem of third-party solutions, giving customers choice and flexibility". According to the EU, the proposed acquisition of Run:ai does not reach the notification thresholds set out in the EU Merger Regulation (EUMR). It was originally notified in Italy, as required by the Italian Competition Act, which enables the Italian competition authority to review transactions not meeting national turnover thresholds when it finds they pose concrete risks for competition and other conditions. The main concern comes from fears that the transaction may negatively affect competition in the markets where Nvidia and Run:ai are active, which are likely to be in the European Economic Area (and therefore include the referring country Italy). The European Commission accepted that the transaction meets the criteria to assess the acquisition under Article 22 of the EUMR. The Commission also concluded that it is "best placed" to examine the transaction given its "knowledge and case experience in related markets". Nvidia cannot now implement the transaction before notifying and obtaining clearance from the Commission. In July, Nvidia faced scrutiny after it was reported that French regulators were reportedly preparing to charge the company for breaking competition laws in the country. In August, the US Department of Justice announced that it is investigating complaints made against the company by its competitors, in which they alleged that the AI chipmaker is actively stifling competition in the chips market. Back in 2022, Nvidia cancelled its planned $40bn acquisition of UK chip designer Arm, which is owned by Softbank Group, citing "significant regulatory challenges" from both sides of the Atlantic. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

Nvidia-Run:ai deal to be reviewed under EU's merger rules | TechCrunch

The European Union has tossed a spanner in the works of chipmaker Nvidia's proposed acquisition of Tel Aviv-based AI workload management startup Run:ai. The deal, which was announced back in April -- with a price-tag of $700 million per our sources -- will be reviewed by the bloc after a request by competition regulators in Italy under the EU Merger Regulation (EUMR). The proposed transaction does not meet the EUMR's standard notification thresholds. However EU law allows a national regulator to notify a transaction to the Commission if it believes it poses serious risks for competition locally and which could affect trade within the bloc's Single Market. "Italy submitted a referral request to the Commission pursuant to Article 22(1) of the EUMR. This provision allows Member States to request the Commission to examine a merger that does not have an EU dimension but affects trade within the Single Market and threatens to significantly affect competition within the territory of the Member State(s) making the request," the Commission wrote in a press release Thursday. The EU's acceptance of the referral means it agrees the proposed transaction meets the criteria for referral under Article 22. "In particular, the transaction threatens to significantly affect competition in the markets where NVIDIA and Run:ai are active, which are likely to be at least European Economic Area-wide and therefore include the referring country Italy," the EU wrote. "The Commission also concluded that it is best placed to examine the transaction given its knowledge and case experience in related markets." The Commission has now asked Nvidia to notify the transaction -- a formal step which means the chipmaker must prepare documentation to inform the bloc's competition enforcers of the details of the proposed merger in order that they can assess impacts. Nvidia cannot implement the transaction before notifying and obtaining clearance from the Commission. So, at a minimum, the referral may add a few weeks to its timeline for completing the deal. However if the EU's preliminary check identifies specific issues of concern the bloc may move to a deeper investigation -- which could add months of delay and uncertainty. While Big Tech enjoyed many years of minimal oversight of its (killer) acquisitions of startups and smaller rivals there has been a change of approach over the last few years as regulators recognized the anti-competitive legacy of sitting on their hands for so long while a few platform giants gobbled up market power. With AI, the rapidly developing software field where innovation is dependent upon access to a small number of key inputs -- such as the graphics processing units, or GPUs, that Nvidia has geared towards training AI models -- the spectre of a rapid repeat of the market concentration issue has encouraged swifter vigilance from antitrust enforcers. Though, as yet, no harder action. So it will certainly be interesting to see what the Commission's review concludes here.

Nvidia's Run:ai Acquisition Draws European Regulatory Scrutiny On Competition Concerns - NVIDIA (NASDAQ:NVDA)

Nvidia must await EU approval before finalizing Run acquisition Nvidia Corp's NVDA Run:ai acquisition has drawn regulatory scrutiny from the European Commission. The Commission will review the proposed acquisition of Israeli-based Run:ai by U.S. tech giant Nvidia. The referral, initially submitted by Italy's competition authority under the EU Merger Regulation (EUMR), is based on concerns that the transaction may have competitive impacts on the European Economic Area (EEA). Also Read: Roblox Q3 Earnings: Bookings Jump 34%, User Base Hits 89 Million, Raises Annual Outlook In April, Nvidia announced its acquisition of Run:ai for reportedly $600 million -- $700 million. Italy's concern stems from the potential impact on AI and data center markets in which both Nvidia and Run:ai operate. The Commission's initial assessment suggests that Nvidia's acquisition of Run:ai could significantly influence competition across AI software markets within the EEA. Run:ai provides GPU orchestration software for optimizing AI compute infrastructure on-premises or in hybrid cloud environments. Nvidia's core strength in supplying GPUs for data center applications raises concerns about potential consolidation in the AI market that could hinder competitive conditions. Until clearance is granted, Nvidia cannot proceed with the transaction. Earlier in 2024, U.S. antitrust authorities began an initial investigation into Nvidia concerning its potential dominance within the artificial intelligence chip sector. The Justice Department's antitrust division contacted Nvidia for contract and partnership details. Additionally, the Federal Trade Commission (FTC) is scrutinizing investments by major technology firms, including Microsoft Corp MSFT, Amazon.com Inc AMZN, and Alphabet Inc GOOG GOOGL, into AI startups to assess any competitive benefits these relationships may have provided. Several U.S. Big Tech giants commanded global regulatory attention for allegedly trying to dominate the market with significant acquisitions, partnerships, and other strategic moves, which drove the smaller players out of competition, leaving consumers with minimal choices. Previously, Nvidia's plans to acquire British chipmaker ARM Holdings ARM had succumbed to global regulatory opposition. The U.K.'s Competition and Markets Authority is also investigating a partnership between Amazon and Anthropic. Meanwhile, Microsoft's $13 billion investment in OpenAI Inc received a clean chit from the European Union's merger watchdogs. Price Actions: NVDA stock is up 1.16% at $134.30 premarket at the last check on Friday. Also Read: Comcast Q3 Earnings: Olympics Power NBCUniversal Gains, Peacock Hits 36M Subscribers, Explores Forming New Company Of Cable Networks Image via Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

AI News: EU To Scrutinize Nvidia's $700M Purchase of Run Labs

AI news: The European Commission has decided to review Nvidia Corporation's planned $700 million acquisition of Run Labs Ltd, an AI workload management startup based in Tel Aviv. This decision came after Italy's competition authority flagged the deal, utilizing its national powers to request an EU-level examination. According to EU law, even if a transaction does not meet standard notification thresholds, a member state can trigger a review if it believes the deal could disrupt local competition and affect trade within the Single Market. In recent AI news, the Italian competition authority has requested that the European Commission review Nvidia's acquisition of Run Labs, an AI infrastructure firm. Italy invoked its powers under EU law, which allows a national body to flag a merger for EU oversight if it poses risks to local markets or could impact trade across the Single Market. This provision supports competition by ensuring impactful transactions receive proper assessment even if they do not meet EU-wide thresholds. The referral to the Commission reflects Italy's concerns that the transaction could influence competition in markets where both Nvidia and Run Labs operate. Run Labs specializes in AI workload management technology, making it a strategic acquisition for the leader in GPU-based AI hardware. The Commission's decision to take up Italy's referral emphasizes the importance of competitive balance in the artificial intelligence sector. According to the AI news, the firm must now submit documentation detailing the transaction to the European Commission. The formal notification initiates a preliminary review to determine whether further investigation is warranted. If the Commission detects potential risks, it may decide to deepen its scrutiny. This could extend the review timeline by months and add complexity to the acquisition process. Moreover, the review will assess whether combining Nvidia's AI hardware with Run Labs' software could limit competition in GPU and AI markets across the European Economic Area. Moreso, they will evaluate market access, resource allocation, and potential competition issues to ensure the merger does not disadvantage other players. In addition, recent AI news shows that regulators in Europe and beyond are taking proactive approach to acquisitions in high-tech sectors. Regulators are keen to prevent potential monopolies that could limit access to innovation in artificial intelligence. The European Commission's decision will influence investor perspectives.

Nvidia's proposed buy of AI startup Run:ai requires EU approval, EU regulators say

BRUSSELS, Oct 31 (Reuters) - U.S. chipmaker Nvidia's (NVDA.O), opens new tab proposed acquisition of AI startup Run:ai will have to be approved by EU antitrust regulators before the deal can be completed, the European Commission said on Thursday. The EU competition enforcer said Nvidia will have to formally seek its approval for the deal, following a request from the Italian competition authority which received an application for approval for the deal from the company. Reporting by Foo Yun Chee; Editing by Sudip Kar-Gupta Our Standards: The Thomson Reuters Trust Principles., opens new tab