Nvidia’s $700M acquisition of Run:ai hits new obstacle as EU demands approval
Nvidia’s $700M acquisition of Run:ai hits new obstacle as EU demands approval
EU antitrust scrutiny follows that of the US Department of Justice and may force Nvidia to offer concessions, delaying its acquisition of the Israeli AI firm.
U.S. chipmaker Nvidia will have to seek EU antitrust clearance for its proposed acquisition of Israeli AI startup Run:ai because it threatens competition in the markets where the companies operate, the European Commission said on Thursday.
The move by the EU antitrust enforcer may require Nvidia to offer concessions to secure its approval for the deal. Regulators on both sides of the Atlantic have recently increased their scrutiny of tech deals, especially by tech giants.
Nvidia announced the acquisition of the Israeli firm in April which will be bought for around $700 million.
Last month, the U.S. Department of Justice issued subpoenas to Nvidia and other companies as part of an investigation into potential antitrust violations by the chip giant. The investigation also covers Nvidia's acquisition of Run:ai, which develops an operating system for AI processors. There are concerns that integrating this system with other Nvidia products could make it more challenging for customers to stop using Nvidia’s chips. Investigators are also examining whether Nvidia offers supplies and special pricing to customers who exclusively use its technology or purchase complete systems from the company.
While the deal does not meet the EU turnover threshold requiring Nvidia to request EU approval, it was notified to the Italian competition agency which subsequently asked the EU watchdog to take up the case.
The Commission said it accepted the Italian request and warned of the competition risks from the deal.
"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," it said in a statement.
Nvidia has posted soaring profits and revenues over the past year as its processors become the gold standard in the chip industry due to their ability to power AI applications, including training models like ChatGPT.
“Run:ai has been a close collaborator with NVIDIA since 2020 and we share a passion for helping our customers make the most of their infrastructure,” said Omri Geller, Run:ai co-founder and CEO, after the deal was announced. “We’re thrilled to join NVIDIA and look forward to continuing our journey together.”
Run:ai raised $75 million in a Series C round in March 2022 led by Tiger Global Management and Insight Partners, who also led the previous Series B round. The round included the participation of additional existing investors, TLV Partners, and S Capital VC, bringing the total funding raised to date to $118 million.
Run:ai was founded in 2018 by Omri Geller (CEO) and Dr. Ronen Dar (CTO). Run:ai has developed an orchestration and virtualization software layer tailored to the unique needs of AI workloads running on GPUs and similar chipsets. Run:ai’s Kubernetes-based container platform for AI clouds efficiently pools and shares GPUs by automatically assigning the necessary amount of computing power – from fractions of GPUs, to multiple GPUs, to multiple nodes of GPUs.
Reuters contributed to this report
